We wondered whether there might be some better offers on the table after Per Johan Claesson, non-exec director and near-20% stakeholder of mid-market ERP firm K3 Business Technology Group, threw in his hand (see Claesson baulks at K3 buy).
Well, it seems there were – and apparently they are “materially higher” than K3’s current share price. So CEO Andy Makeham has formally put up the For Sale sign in the shop window. Deloitte Corporate Finance is running the process.
What with the rapid deconstruction of peer mid-market player, Maxima, now well under way (see More minimisation at Maxima) – and ironically, K3 acquired a bit of its business just before Xmas (see here) – you really have to ask whether the days of mid-market ‘buy-and-build’- are well and truly numbered.
Not that there isn’t room for consolidation in that marketplace – there’s a lot of subscale businesses out there that will never be able to survive alone for terribly long. It’s just that the strategy of slinging a bunch of them together to form some sort of mega-play is deeply flawed. Maybe you can get to £50m-odd turnover like K3 and Maxima. At a push, perhaps even £100m if you are really lucky. But after that? Well, I guess that’s when you put in the call to Deloitte and peers.