Software firm completes deal worth nearly £15m

A MANCHESTER software firm has sold its managed services unit to a private equity-backed company for almost £15m.

K3 Business Technology, which provides business software, cloud solutions and managed services, has completed the deal for Starcom Technologies with Node4, an infrastructure and services company backed by Bowmark Capital.

The total consideration for the disposal was £14.7m, including £500,000 cash on the balance sheet, paid entirely in cash on completion.

K3 has said the transaction has generated a ‘significant profit’ on disposal, in excess of £10m.

In the unaudited results of the financial year to 30 November 2020, Starcom generated £10.2m in revenues and pre-tax profits of £1.2m.

The management team and staff of Starcom have transferred with the sale of the business together with its 280 customers.

Under the terms of a transitional services agreement, Starcom will continue to provide K3 and its customers with managed services for at least three years.

Adalsteinn Valdimarsson, chief executive of K3 Business Technology Group, said: “Node4 is an excellent new home for Starcom with its focus exclusively on managed services, and the deal enables us to accelerate our strategy of growing own IP product revenue. We wish Starcom great success for the future.”

Andrew Gilbert, chief executive of Node4, added: “We are excited to be working with the Starcom team and their customers, with our shared mission of helping businesses with cloud-led managed services. We would like to thank K3 for working with us and are looking forward to continuing the relationship.”