Harrogate’s Redcentric acquires Manchester-based Calyx Managed Services in £12m deal

Harrogate-based Redcentric plc, a leading UK IT managed services provider, announced today that it has conditionally acquired Calyx Managed Services Limited (Calyx) for a total consideration of £12 million, payable in cash on completion.

Completion of the acquisition is expected to occur on 13 April 2015

The acquisition will likely have immediate effect on the enhancement of earnings. Calyx’s portfolio of services as well as its array of customers are a solid 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 following a period of significant restructuring, which included the dissolution of the Break Fix and Carrier Services sectors.

The acquisition is conditional on the completion of the disposal of the sectors.

Calyx’s focal point is now 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.

Furthermore, Redcentric also announced it has entered into new long-term bank funding facilities, which refinances the company’s existing bank facility, as well as providing long-term funding stability, and will be partly used to finance this acquisition.

The new funding facilities consist of a five-year £40 million Revolving Credit Facility (RCF), with a £20 million accordion, along with a £5 million Asset Financing Facility and a £5 million Overdraft Facility.

The RCF has been provided jointly by Barclays Bank PLC and The Royal Bank of Scotland PLC, with Lombard Technology Services Ltd providing the Asset Financing Facility and Barclays the Overdraft Facility.

Fraser Fisher, chief operating officer of Redcentric, said: “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.”

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