• New York
  • Berlin
  • London
inTechnology
Oakley advises on £65m InTechnology Managed Services disposal
Completed Transactions - inTechnology Logo
Sector:
Hosting & Datacentres
Transaction Type:
Disposal, ECM
Date:
November 2013
Deal Value:
£65m

The proposed disposal of InTechnology Managed Services Limited (“IMS”, “the Company”) is another demonstration of the strong ICT credentials and focus of Oakley Capital Corporate Finance (“Oakley”). Redcentric plc (“Redcentric”) is buying IMS for a total consideration of £65 million in cash in a reverse takeover. The deal is the latest in a series of managed services deals which include the £55m acquisition of Star Internet by Claranet in late 2012.

IMS is a leading UK mid-market provider of managed network, data, hosting and voice telephony services and has developed its services portfolio to help its customers to transition their on-premise IT solutions to cloud-based managed services. IMS is a long established business based in Harrogate, Yorkshire and employs 190 staff. The Company generated revenue of £40.9 million and EBITDA of £8.3 million in the year ended 31 March 2013 (before any allocated central costs from InTechnology plc). IMS is experiencing good revenue and EBITDAgrowth and is highly cash generative.

The acquisition is a transformational transaction for Redcentric that will double its revenues and increase recurring revenues to more than 80%. In the process it creates one of the largest independent managed services businesses in the UK. Redcentric’s network services, application, systems and security management capabilities are augmented by InTechnology’s data centre estate, network and VoIP capacity. The enlarged group will be headquartered in Harrogate.

The proposed acquisition by Redcentric plc constitutes a reverse takeover under the AIM Rules, and a shareholder General Meeting is scheduled for 5 December 2013, with completion of the transaction scheduled for 6 December 2013. The cash consideration will be partly funded by Redcentric plc by way of a placing to raise £64 million. Oakley advised IMS throughout the deal, which was strongly supported by existing and new shareholders in Redcentric.

Peter Wilkinson, Founder and CEO of InTechnology said

“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 would like to thank Oakley Capital for their effective support to me and my team through the transaction process.”

The Oakley team advising InTechnology plc was led by Chris Brooks, Director, Chris Godsmark, Managing Partner and Marc Horn, Associate.

Chris Brooks said

“We are delighted to have assisted InTechnology plc with this transaction. Peter and his team at InTechnology Managed Services had built a strong group with an attractive portfolio of fully up to date managed data, voice, hosting and cloud services. The recent investment in data centres and the core network together with a great customer base will be of real benefit to Redcentric and positions the enlarged business to go from strength to strength. The transaction is a good outcome for both sets of shareholders.”

Chris Godsmark, Managing Partner at Oakley said,

“This is the latest of many managed services deals we have advised on over the past 6 years. Oakley worked closely with both IMS and Redcentric through to completion. Our pipeline in the managed services, telecoms and ICT space is stronger than ever and this puts us in an encouraging position as we look forward to 2014.”

For more information please contact:

Oakley Capital Corporate Finance
Chris Brooks, Managing Director
+44 207 766 6900

*Completed by Oakley Capital Corporate Finance

Related Transactions