Business advisory firms agree to £27m merger deal

K3 said the merger with Bradford-based Quantuma will help it to build a more diverse professional services group with enhanced capabilities in restructuring, corporate finance, tax advisory, forensic accounting and expert witness services.

The deal includes a cash free, debt free initial consideration of £27m, in addition to maximum combined earn outs of £15m and an additional 645,513 growth shares.

Quantuma, which was set up in 2013 by Carl Jackson, expanded into Yorkshire in May 2019 following its acquisition of Kingsland Business Recovery. The firm has grown to become a £23m turnover business, with 250 staff across 17 UK locations. It also operates from three international offices in Cyprus and Mauritius.

Established in 1998, Bolton-based K3 is a multi-disciplinary professional services firm providing advisory services to SMEs. It listed on AIM in 2017 and has seen its market capitalisation more than double in the last three years.

K3 recently acquired Derby-based R&D tax credit specialists Randd UK, in an £11.6m deal.

Quantuma's CEO Carl Jackson will join the K3 board as an executive director.

Rehan Ahmed, managing director at Quantuma, said: “This is a significant milestone for both K3 and Quantuma. The combination of high quality businesses will provide an independent and compelling proposition in the mid-market.

“Demand for Quantuma’s services is already high and we anticipate this gathering pace as the Government withdraws its Covid-related financial support. Becoming part of a listed plc will enable us to take on more significant mandates and provide greater access to larger corporates, both at home and overseas.

“This is very much business as usual for Quantuma. We will continue to develop our cross-border capabilities and are in advanced talks with a number of lateral hires to further strengthen our UK team.”

John Rigby, CEO at K3 Capital Group, added: “Our strategic vision is to  develop a  group of high performing businesses offering a range of  complementary advisory services  to SMEs and their stakeholders. 

“Quantuma has developed a strong brand and has an impressive growth  story. We’re delighted to be working alongside the firm’s like-minded and entrepreneurial  senior leadership team.

"Together, our  intention is  to continue to invest in the group to enable us to drive organic growth by leveraging our client acquisition strategies, whilst also developing further revenue streams via a series of strategic  acquisitions and lateral hires.”