Sage 300 CRE 16.1 r5 client install does not install timberline licensing service

i upgraded the server to 16.1 r5 and when i install the client on the work stations it installs successfully.

however, the timberline pervasive licensing service does not install and th work station does not get the action/pervasive key.

and they cannot connect to the data files.

i've follow the KB articles related to this issue but nothing has worked so far.

Our workstations are running windows 7 pro sp1. The server works fine and it has a valid key.

Anybody else ran into this problem?

thanks