Published on: April 25, 2016

Placing and complimentary acquisition

K3 has announced a placing of £13.5 million before costs to fund the acquisition of Retail Support International (also known as DdD Retail) for up to €10 million. DdD operates in Denmark, Germany, Sweden and Norway and provides a proprietary combined point of sale software (cloud based)/hardware solution, focusing on the fashion retail industry. Complementary to its existing retail software offering, the deal is in line with K3’s strategy of seeking acquisitions which accelerate growth and also increase sales of K3-owned intellectual property. We estimate that it will be 4%-5% enhancing in the first full year of ownership and upgrade Adjusted EPS in FY16E by 1% and in FY17E by 4%. The accompanying trading update reiterates that the Group has a ‘very healthy’ pipeline of new deals and notes that management will consider further acquisitions and disposal of non-core businesses.

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