K3C.L Share News (K3C)

(Sharecast News) - K3 Capital said it had raised £30.5m to fund the purchase of Randd, an arranger of research and development tax credits for businesses, for up to £16.8m and further acquisitions.
The company said on Monday morning it would issue up to 20.3m new shares at 150p each. Announcing the result of the issue K3 said it has raised £6.95m in a vendor placing to pay Randd directors in cash for their part of their stakes in the company and £23.02m by placing shares with institutional and other investors.

K3 also raised £0.45m from retail investors through a retail subscription and 0.03m from Chief Executive John Rigby who bought buy 20,000 new shares.

K3 shares fell 13.6% to 152p at 14:10 BST.

Bolton-based K3 said in addition to an initial £9.27m payment for privately owned Randd it would use the money to fund an earn-out over three years costing as much as £7.5m based on performance. Placing the shares for the Randd purchase depends on the deal completing. The rest of the money will be used to pay fees to advisers on the fundraising and acquisition and for further purchases.

K3 is a business sale broker that matches sellers of small and medium enterprises with buyers in the UK and overseas. Randd, founded in 2008 and based in Derby, helps businesses to secure R&D tax credits from the government in return for a percentage of the amount achieved.

K3 said Randd was a complementary business to its existing operations with cross-selling opportunities for both companies. It said Randd's prospects were linked to the market for R&D spending in the UK and that this had grown consistently as the UK had sought to fund new technologies and products.

Rigby said: "The placing has received strong support from both institutional and retail investors. This substantial fundraising allows us to make the acquisition of Randd, but the fundraise also significantly strengthens our balance sheet and puts us in a strong position to make further acquisitions. In Randd we have identified a business with quality at its core and one which we believe will continue to flourish under the K3 banner."

He said the company had its eyes on a number of other professional services businesses as potential acquisition targets.