K3 Business Technology Group Regulatory News (KBT)

14 July 2011

AIM: KBT

K3 BUSINESS TECHNOLOGY GROUP PLC

("K3" or "the Company")

Placing

K3, which provides and supports Enterprise Resource Planning software, hosting and managed services to the supply chain industry, is pleased to announce a placing of 2,564,408 new ordinary shares of 25p each ("New Ordinary Shares") at a price of 205p per share (the "New Placing") with new and existing institutional investors. The New Placing, which was oversubscribed, has raised a total of approximately £5.3 million (before expenses).

The placing price of 205p per share represents a discount of approximately 5.5% to the closing mid market share price on 13 July 2011, being the last practicable date prior to the issue of this announcement. The New Placing is, inter alia, conditional on admission of the New Ordinary Shares to trading on AIM ("Admission").

The proceeds of the New Placing will be used to support K3's strategy of seeking acquisitions to maximise the growth opportunities available. The Company has an established track record in successfully acquiring and integrating complementary businesses and the Board continues to identify targets which will add contracted, recurring income as well as those which will further develop the Company's product offering.

In addition to the New Placing, 1,200,000 existing ordinary shares on behalf of Laxnes B.V. ("Laxnes") and 63,993 existing ordinary shares on behalf of an employee of the Company have been placed with new and existing shareholders (the "Secondary Placing") at 205p per share. Following the Secondary Placing, Laxnes no longer has a disclosable interest in K3.

The 2,564,408 New Ordinary Shares represent approximately 9.0% of K3's enlarged issued share capital. Application has been made for the New Ordinary Shares to be admitted to trading on AIM and it is expected that admission will take place on 19 July 2011. The New Ordinary Shares will rank pari passu with the existing shares of the Company. Following this allotment the total issued share capital of the Company will increase to 28,472,163 ordinary shares.  Canaccord Genuity is acting as sole book runner in relation to both the New and Secondary Placings.

The Company is also pleased to announce it has further strengthened its cash resources for potential acquisitions, having agreed additional banking facilities with its existing bank, Barclays Bank PLC, to match the proceeds of the New Placing on a pound-for-pound basis.

Andy Makeham, Chief Executive of K3, commented, 

"We are delighted to have completed this placing with good support from both new and existing institutional shareholders. K3 has demonstrated its ability to deliver strong growth both organically and via acquisitions and we believe that the demand for shares in the placing reflects the exciting opportunities for further expansion.

With these funds in place, as well as the support of our bank, Barclays, K3 is well positioned to achieve its growth ambitions."

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