Bolton-based K3 Capital agrees £271m takeover

Private-equity firm Sun European Partners has agreed a deal to buy Bolton-based K3 Capital Group that values the SME advisory services firm at about £271 million, the companies said.

The proposed deal comes a week after K3 Capital said it was in advanced talks to sell itself to Sun Capital Partners Group.

Sun European Partners is the European unit of US-based private equity firm Sun Capital Partners Group.

The agreed deal for 350p per K3 Capital share in cash, represents a premium of about 16.7% to the company’s close on December 7, the companies said.

K3 Capital’s board plans to unanimously recommend the deal to shareholders.

K3 Capital chairman Ian Mattioli said: “Since IPO in 2017, management has continued to execute its strategy of building a multi-disciplinary and complementary group, providing specialist advisory services to SMEs across three core divisions, business sales, tax and restructuring.

“K3 is now a diversified group with a resilient, high margin and cash generative business model and a data-driven marketing platform at its core, driving strong levels of organic growth.

“Sun is an experienced investor with a proven track record in supporting strong management teams in achieving their growth ambitions.

“K3 will be able to benefit from their operational expertise whilst having a supportive partner with the capital required to fund K3’s M&A strategy.

“Whilst being confident on the outlook for K3, we are mindful of the weakening macroeconomic environment in the UK and the pressures that this is likely to put on UK SMEs over the medium term and, therefore, it is the independent directors view that this offer represents an opportunity for shareholders to realise their entire investment, in cash, at an attractive valuation.”

Alexander Wyndham, a Principal at Sun, said: “K3 has consistently won market share across its various verticals and cemented itself as a leader within the SME advisory sector.

“As a long-term investor with significant buy and build experience, we are excited to partner with management to capitalise on market opportunities.

“We look forward to supporting management scale the business through the expansion of operations and service offerings.”