Redcentric sells data centre business to Stellanor for up to £127 million

LONDON - UK IT managed services provider Redcentric plc (AIM:RCN) has agreed to sell its data centre business to Stellanor Datacenters Group Limited for an enterprise value of up to £127 million ($166 million), the company announced Thursday.

The all-cash transaction involves Redcentric Data Centres Limited, which comprises the group’s entire data centre operations. Stellanor is backed by a fund managed by DWS Group.

The final consideration is subject to adjustments to ensure the business is sold on a cash-free, debt-free basis, with further modifications related to working capital targets and various commercial and property contract matters.

Based on ongoing discussions, Redcentric estimates the adjusted enterprise value will range between £115 million and £127 million, representing approximately 15.1 times the data centre unit’s FY25 adjusted EBITDA including property lease payments.

Completion of the sale depends on several conditions being met, including regulatory approvals and resolution of matters related to the separation of the business. The transaction has a long-stop date of May 31, 2026, with any outstanding property or commercial matters to be concluded within twelve months after completion.

Redcentric plans to use proceeds from the sale to reduce its debt, return capital to shareholders via a potential tender offer, and retain funds to support growth opportunities within its continuing managed services provider operations.

"The completion of the DC sale will allow management to focus squarely on the MSP business which has a very strong brand and market position in both the public and private sectors," said Michelle Senecal De Fonseca, Chief Executive Officer of Redcentric.

The company currently has a £60 million revolving credit facility, of which £41 million has been drawn. The board expects to significantly reduce both the ceiling of this facility and the amount drawn following receipt of the sale proceeds.

This article is based on a press release statement from Redcentric plc.

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