Quantuma agrees £27 million merger with K3 Capital Group

04 August 2020 Consultancy.uk 4 min. read
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Business advisory firm Quantuma has become part of the AIM-listed K3 Capital Group, as it leverages an acquisition campaign to forge a global independent advisory practice. The deal will conclude for around £27 million, and comes as demand for consultancies specialising in insolvency and restructuring work from UK clients booms.

Carl Jackson, CEO at Quantuma, who also joins the K3 board as an executive director, said, “The combination of high quality businesses will provide an independent and compelling proposition in the mid-market. Becoming part of a listed company 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.” 

An independent advisory firm covering a variety of different service lines, Quantuma is still best known for its expertise in insolvency and restructuring work – something which has positioned it for strong growth in 2020. The firm had already been steadily expanding its presence across Britain through late 2019 – with the launch of new offices in Scotland and Wales taking its UK office count to 16 – and a number of senior hires across its practices early this year. With the advent of the coronavirus pandemic, and the economic shockwaves which it initiated, the firm had to further accelerate this expansion to keep up with demand.

Quantuma agrees £27 million merger with K3 Capital Group

Earlier in the spring, Quantuma Partner Marie Wadeson told Consultancy.uk that the firm’s year-end-figures were expected to reveal a leap from UK revenues of 2018’s £15.5 million to “somewhere in the region of £22 million” in 2019. With the sudden spike in clients looking for corporate recovery services, and in anticipation of this gathering pace as the Government withdraws its Covid-19-related financial support, the firm has reallocated a number of its resources to cope.

With the Covid-19 outbreak having shunted the global economy into a recession, there are few safe bets left for investors to make. That is why it is arguably unsurprising that a firm well-known for its insolvency work has attracted the eye of a buyer. The deal reached with K3 Capital Group will conclude for a debt free consideration of £26.95 million in addition to maximum combined earn outs of £15 million and an additional 645,513 growth shares.

Established in 1998, Bolton-based K3 is a multi-disciplinary professional services firm providing advisory services to SMEs. Having been listed on the London Stock Exchange sub-market AIM since 2017, K3 has recently been working to build a holistic global advisory practice via a sustained acquisition campaign. K3 recently acquired Derby-based R&D tax credit specialists Randd UK to that end for a reported £11.6 million. The deal with Quantuma will further build on this, helping to build a more diverse professional services group with capabilities in restructuring, corporate finance, tax advisory, forensic accounting and expert witness services.

John Rigby, CEO at K3 Capital Group, commented, “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.” 

As the Covid-19 pandemic continues to push the global economy into a sustained recession, Quantuma is only the latest in a string of consultancies specialising in insolvency and corporate recovery services to attract backing. The likelihood of heightened business for the restructuring consulting segment was recently illustrated by a consortium of investors led by Stone Point Capital and Further Global, who were willing to sink an estimated $4.2 billion into the purchase of Duff & Phelps. Similarly, Moore Fleming was purchased by NMS Consulting, as the US firm prepared to ramp up its offering across Europe.