Redcentric PLC Acquisition of Piksel Industry Solutions Limited (4607N)
September 30 2021 - 2:00AM
UK Regulatory
TIDMRCN
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 GBP1.1m anticipated.
-- Expected to be immediately earnings enhancing.
-- C onsideration for the acquisition of US$13.0m (c.GBP9.5m)
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.GBP9.5m)
payable in cash of which US$12.0m (cGBP8.8m) is payable immediately
with US$1.0m (c.GBP0.7m) 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 GBP10m and EBITDA of GBP0.4m.
GBP0.4m of synergies will be realised within the first three months
of ownership, with at least a further GBP0.7m of synergies expected
to be realised over the following 12 months. As at 31 July 2021,
Piksel IS had net assets of GBP2.2m including an assumed
intra-group debtor of GBP3.1m which will be written off immediately
post the acquisition and cash on the balance sheet of GBP0.3m
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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