Acquisition of customer base will add specialist skills, build recurring revenues and enable cross-selling opportunities
Acquisition of customer base will add specialist skills, build recurring revenues and enable cross-selling opportunities
K3, which supplies enterprise resource planning (ERP) software, hosting and managed services to retail, manufacturing and logistics sectors, has announced the acquisition of the retail merchandising division of Azurri Computer Solutions (Azurri Retail) for £1 million.
Further consideration of up to £500,000 for the acquisition will be payable dependent on increases in gross margin generated by Azurri Retail over the next two years, according to K3.
Prestigious customer base
With a customer base including Robert Dyas, Matalan, JJB Sports, Littlewoods, Holland & Barratt and the National Trust, Bolton-based Azurri Retail generated sales of £1m with £600,000 of recurring revenue and an underlying profit of £400,000 for the year to December 2010.
The acquiring company said Azurri Retail represented a “complementary fit” with K3's existing retail software operations, adding further specialist skills. Its integration with the K3 Group is in line with its strategy to build recurring revenues and acquire profitable user bases with cross-selling opportunities, in particular for its hosting and managed services offering.
Part of ongoing growth strategy
Andy Makeham, chief executive of Manchester-based K3, stated: “Azurri Retail represents an exciting opportunity to acquire a prestigious retail customer base.
“We look forward to working together with our new customers to ensure the continuing successful delivery of their IT requirements.”
This is K3’s third acquisition so far this year, having bought £3.1m-turnover retail and distribution technology specialist Clarita Solutions for £820,000, plus £230,000 worth of financial obligations in March. It also bought Nottinghamshire-based Sense Enterprise Solutions for £2.45m in the same month.
The retail division of K3 counts Topps Tiles, Goi-Goi and IKEA as customers of its Microsoft Dynamics-based business software packages.
