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Redcentric PLC (RCN)

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Thursday 30 September, 2021

Redcentric PLC

Acquisition of Piksel Industry Solutions Limited

RNS Number : 4607N
Redcentric PLC
30 September 2021
 

Redcentric plc

ACQUISITION OF PIKSEL INDUSTRY SOLUTIONS LTD

A strategically important acquisition enabling the delivery of cloud-based digital transformation services.  

 

Redcentric plc ("Redcentric"), a leading UK IT managed services provider, is pleased to announce the acquisition of Piksel Industry Solutions Limited ("Piksel IS") (the "Acquisition").

Highlights

· Significantly enhances Redcentric's service offerings in both public cloud and security.

· Complementary customer base with excellent cross-sell opportunities.

· Significant annualised synergies of at least £1.1m anticipated.

· Expected to be immediately earnings enhancing.

· C onsideration for the acquisition of US$13.0m (c.£9.5m) payable in cash funded entirely from existing cash resources.

About Piksel IS

 

Piksel IS is a provider of IT modernisation and digital transformation services, focussing on public cloud. It also delivers security and IT managed services, and has a strong application development and DevOps capability.  Based in York and London, Piksel IS has 93 employees, the majority of whom are highly skilled technical individuals.  Its managed IT services are provided across a broad range of industry verticals, with a particular focus on Amazon Web Services and Microsoft Azure.   

 

Strategic rationale

 

This strategically important acquisition delivers on the Board's stated strategy to assist growth through acquisitions.  The Acquisition gives Redcentric leading-edge skills and capabilities in public cloud and security to enable it to immediately provide additional solutions to an enlarged customer base.  

 

The Acquisition is expected to be immediately earnings enhancing and the Board believes there is scope to deliver attractive revenue and profit growth over the medium term.

 

Financials

The consideration for the Acquisition is US$13.0m (c.£9.5m) payable in cash of which US$12.0m (c£8.8m) is payable immediately with US$1.0m (c.£0.7m) being held in escrow for a period of 12 months. The consideration is payable out of the Redcentric's existing cash resources. The Acquisition is effective from 1 August 2021 and, on a proforma basis, the acquired business is expected to generate annualised revenues of £10m and EBITDA of £0.4m.  £0.4m of synergies will be realised within the first three months of ownership, with at least a further £0.7m of synergies expected to be realised over the following 12 months.  As at 31 July 2021, Piksel IS had net assets of £2.2m including an assumed intra-group debtor of £3.1m which will be written off immediately post the acquisition and cash on the balance sheet of £0.3m

 

 

Peter Brotherton, Chief Executive Officer, Redcentric, commented:   

 

"This is an extremely exciting strategic acquisition for Redcentric and combines the secure, asset light, digital transformation capabilities of Piksel IS with the managed infrastructure, unified communications and connectivity solutions of Redcentric. We are delighted that the combined portfolio will accelerate the Redcentric group's ability to deliver industry leading, transformative solutions to our customers and expands our capabilities in hyperscale public cloud and security."   

 

Paul Mardling, Managing Director, Piksel Industry Solutions, commented:

 

"We are looking forward to being part of Redcentric.  The combined expertise of Redcentric and Piksel IS will bring benefits to both our customers and people.  We are now part of a successful larger group and that will help us capitalise on the growing and substantial market for advanced cloud services, networks and cyber security."

 

 

Enquiries:

Redcentric plc    +44 (0)800 983 2522 

Peter Brotherton, Chief Executive Officer 

David Senior, Chief Financial Officer   

finnCap Ltd - Nomad and Broker +44 (0)20 7220 0500

Marc Milmo / Simon Hicks / Charlie Beeson (Corporate Finance)

Andrew Burdis / Sunila de Silva (ECM)   

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