Proposed acquisition of InTechnology Managed Services Limited
18 November 2013
Proposed acquisition of InTechnology Managed Services Limited, Placing and Re Admission to AIM
Redcentric plc (AIM:RCN.L), a leading end to end managed service provider delivering innovative technology to improve business productivity and efficiency, is pleased to announce it has agreed subject, inter alia, to Shareholder approval at the General Meeting, to acquire the entire issued share capital of InTechnology Managed Services Limited, the wholly owned subsidiary of InTechnology plc, for £65 million payable in cash at Completion.
- Transformational acquisition that will double revenues and increase recurring revenues to more than 80 per cent, creating one of the largest independent managed services businesses in the UK
- Redcentric and InTechnology are highly complementary businesses; Redcentric’s network services, application, systems and security management capabilities are augmented by InTechnology's data centre estate, network and VoIP capacity
- Significant proprietary data centre estate added with immediate capacity for growth; the estate will contain 1255 racks
- Placing heavily oversubscribed, several blue chip institutions added to share register
- Acquisition expected to be accretive in first full year of ownership
The Consideration will be partly funded by way of a placing of 80,000,000 Placing Shares at a price of 80 pence per Placing Share with certain institutional investors to raise £64 million (before expenses), with the remainder being financed by an increase in the Company’s existing banking facilities.
In view of the size of the Transaction, the Acquisition is classified as a reverse takeover under the AIM Rules and is therefore conditional, inter alia, on the approval of Shareholders. Such approval is being sought at the General Meeting to be held at the offices of DAC Beachcroft LLP, 100 Fetter Lane, London EC4A 1BN at 10.30 a.m. on 5 December 2013. The Company has received irrevocable commitments to vote in favour of the Resolutions in respect of beneficial holdings totalling 46.3 per cent. of the issued share capital of the Company.
Tony Weaver, CEO of Redcentric said: "This transformational acquisition will help the Company to achieve its aim of becoming the leading independent managed services business in the UK. Redcentric will become a go to provider in the mid market for end-to-end managed services as we will be one of very few providers with high quality data centre assets connected by a national data network with a significant cloud platform and a broad suite of technical support skills. I am excited about the opportunities that exist and would like to thank both existing and new shareholders for their overwhelming support of the transaction."
Peter Wilkinson, CEO of InTechnology added: "I have felt for some time that InTechnology Managed Services needed to become a much bigger force in the UK market. This transaction instantly achieves that aim, the two companies combined creates a major force in the market which provides an unrivalled range of quality products and services to its large expanded customer base. I am very proud of the business we have built and would like to thank customers and staff alike for their support, which has contributed to its success, and look forward to an exciting future."
An admission document is being sent to all shareholders which sets out the background to and reasons for the Acquisition and the Placing and explains why the Directors consider that the Transaction is in the best interests of the Company and its shareholders as a whole and recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting, notice of which is set out at the end of the Admission Document.
Definitions used in this announcement carry the same meaning as set out in the Admission Document.