Acquisition of business and assets of Sungard

RNS Number : 9675N

Redcentric PLC

07 June 2022

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

Redcentric plc

Acquisition of business and assets of Sungard data centres

Redcentric plc (AIM: RCN) ("Redcentric" or the "Company"), a leading UK IT managed services provider, is pleased to announce that its subsidiary, Redcentric Solutions Ltd ("RSL"), has exchanged conditional contracts for the acquisition of the business and assets relating to the operation of up to three data centres ("Sungard DCs") and the provision of other colocation and network services from Sungard Availability Services (UK) Limited (in administration) ("Sungard UK").

Completion of the acquisition of each of the Sungard DCs is conditional on certain revenue thresholds being met based on customers in each of the Sungard DCs agreeing new contract terms with RSL. Completion will occur once the thresholds are met and no later than 23 days following exchange of contracts. In the event the thresholds are not met in relation to each of the Sungard DCs, the acquisition of the relevant Sungard DC will not complete.

The value of the acquisitions is calculated by reference to the annualised recurring revenue derived from Sungard DC customers with which RSL agrees new contract terms and certain other performance criteria. The initial minimum consideration payable on completion, assuming the acquisition of all three Sungard DCs, is £11m. The initial maximum consideration payable on completion, assuming acquisition of all three Sungard DCs, is £22m. Pursuant to the performance criteria, which expire twelve months following completion, there is a potential further up to £7.625m payable. All consideration payable will be satisfied in cash.  

Due to the nature of the transaction and its dependence on the value of new contracts agreed with Sungard DC customers, further details in relation to the acquisition, including financial information, will be provided on completion, should it occur.

Redcentric further announces that it has completed the acquisition of the business carried on by Sungard UK of providing consulting and AWS cloud related services, for a consideration of £4.2m, paid in cash.

Peter Brotherton, Chief Executive Officer, Redcentric, commented:

" Following completion of the capability acquisitions of Piksel Industry Solutions Ltd and 7 Elements Ltd in September 2021 and March 2022 respectively, this acquisition is the first scale acquisition completed by Redcentric, in line with its strategy.  

The Sungard DCs principally provide colocation and cloud services which complement the Redcentric offering perfectly . In addition, the Sungard DCs come with a superb blue chip customer base and should the acquisitions complete, they provide Redcentric with an exciting opportunity to accelerate its growth."

Enquiries:

Redcentric plc Peter Brotherton, Chief Executive Officer David Senior, Chief Financial Officer	[phone]
finnCap Ltd - Nomad and Sole Broker Marc Milmo / Simon Hicks / Charlie Beeson (Corporate Finance) Andrew Burdis / Sunila de Silva (ECM) Oakley Advisory Limited - Financial Advisor Chris Godsmark / Marc Jones / James Whyms	[phone] [phone]

 

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