Acquisition of Calyx Managed Services

02 April 2015

Redcentric plc (AIM:RCN), a leading UK IT managed services provider, is pleased to announce that it has conditionally acquired Calyx Managed Services Limited ("Calyx") for a total consideration of £12 million, payable in cash on completion (subject to an adjustment for restructuring costs) (the "Acquisition"). Completion is expected to occur on or around 13 April 2015.

The Acquisition is expected to be immediately earnings enhancing. Calyx's portfolio of services and its range of customers are an excellent strategic addition for Redcentric, which will provide these new customers with high levels of service and exposure to a broader suite of solutions.

Redcentric is acquiring Calyx from MXC Capital Limited ("MXC Capital") following a period of significant restructuring, which included the disposals of the Break Fix and Carrier Services divisions. The acquisition is conditional on the completion of these disposals. Calyx is now a focused IT managed services and professional and infrastructure services business, free of liabilities arising from the restructuring process.

For the year ended 31 December 2014, Calyx's IT managed services and professional and infrastructure services business generated a turnover of £9.1 million and a gross profit of £5.1 million. As at 31 December 2014, the business had gross assets of £4.3 million. The Acquisition will be funded by a new bank facility announced separately today.

Fraser Fisher, Chief Operating Officer of Redcentric, commented; "We are delighted with this acquisition: it fits our strategy well, and will be earnings enhancing as we expect to generate operating margins in line with our existing business. We welcome the Calyx clients and look forward to providing a high quality service while offering a broader range of solutions. This acquisition builds on our successful and growing Redcentric platform; following the integration of Calyx we will seek to augment our strong organic growth with further acquisitions that fit our investment criteria."