K3 Business Technology Group Regulatory News (KBT)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

K3 Business Technology Group plc

("K3" or the "Company" or the "Group")

Confirmation of successful £7.5 million fundraise subject to shareholder approval

K3, which provides mission-critical software, cloud solutions and managed services to the retail, manufacturing and distribution sectors, is pleased to announce that, following the announcement of 7.00 a.m. today, the Company has raised a total of £7,494,500 (before expenses) by means of an accelerated bookbuild with new and existing investors, of 5,353,214 Placing Shares at a price of 140 pence per share.

Kestrel Partners LLP ("Kestrel"), Hargreave Hale Limited ("Hargreave Hale") and Liontrust Investment Partners LLP ("Liontrust") have agreed to subscribe for 2,225,000, 714,286 and 600,000 Placing Shares respectively as part of the Placing. These Shareholders are related parties of the Company for the purposes of the AIM Rules by virtue of their status as substantial shareholders of the Company. The Directors consider, having consulted with the Company's nominated adviser, finnCap, that the terms of the Placing with such related parties are fair and reasonable insofar as the Company's shareholders are concerned. Kestrel has further irrevocably committed to vote in favour of the Resolution in respect of 6,955,420 Ordinary Shares.

Mr Valdimarsson, Mr Price and Mr Darling have now agreed to subscribe for 71,429, 50,000 and 14,286 Placing Shares respectively as part of the Placing. Mr Valdimarsson, Mr Price and Mr Darling are related parties of the Company for the purposes of the AIM Rules by virtue of their status as Directors of the Company, or subsidiary companies within the Group. Mr Bolton, Mr Claesson, Mr Manley and Mr Morland (being the independent directors for these purposes) consider, having consulted with the Company's nominated adviser, finnCap, that the terms of the Placing with such related parties is fair and reasonable insofar as the Company's Shareholders are concerned.

The Placing is subject to the passing of the Resolution at the General Meeting. Shareholder approval in respect of the Placing will be sought at the General Meeting which is being convened for 10:00 a.m. on 4 July 2017 at the offices of finnCap, 60 New Broad Street, London, EC2M 1JJ. Provided that the Resolution is passed and the Placing has otherwise become unconditional, completion of the Placing is expected to take place on 5 July 2017.

A Circular and a notice of General Meeting will be posted to Shareholders shortly and is available on K3's website, www.k3btg.com

Capitalised terms not otherwise defined in this announcement shall have the same meaning ascribed to such terms in the announcement released today at 7.00 a.m. unless the context requires otherwise.

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