Redcentric gives up looking for a buyer

Managed services provider (MSP) Redcentric has given up looking for a new owner after several months of failed talks.

The firm had indicated in September that it was exploring a sale as it looked to ensure that it could continue to deliver value to shareholders.

Redcentric apparently chatted to Macquarie Principal Finance, UK branch and Six Degrees Holdings but these talks went nowhere.

“The board has held constructive discussions with a significant number of interested parties. However, these discussions did not materialise into any fully funded offers. Redcentric, therefore, announces that the board has decided to terminate the formal sale process with immediate effect”, the firm stated.

“The board is focused on building on the existing strong momentum within the business and, as noted in its announcement on 2 September 2020, will continue to evaluate potential options in relation to organic growth and/or potential acquisitions that might be made by the company to achieve maximum value for shareholders in the medium term”, it added.

At the same time, the firm was able to share H1 numbers for the six months to 30 September, which saw a  seven per cent increase in revenue to £46.2 million and a 19 percent increase in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) to £12.3 million.

Recurring revenues now account for 89 percent of the total revenues, improving by six percent on the previous year.

Ian Johnson, non-executive chairman at Redcentric, said: ““Our very significant presence in the public and private healthcare sectors, highly relevant products and high levels of recurring revenues combine to put us in an excellent position to withstand the current challenges associated with COVID-19 and the downturn in the wider economy.

“The outlook for the remainder of the year remains positive, although the board remains cautious in respect of the longer-term economic uncertainty posed by a prolonged COVID-19 pandemic”, he added.

He commented on the termination of the sale process and hinted that the firm could well turn into a buyer in the future.