RedstoneConnect is set to sell its managed services and system integration divisions for £21.6m to focus solely on its software development arm.
In a notice to the London Stock Exchange this morning, RedstoneConnect said it will offload two of its three divisions, leaving it with just its software unit.
This unit houses OneSpace, which is an occupancy management programme developed by the firm.
Included in the sale is Commensus Limited, which RedstoneConnect acquired in 2016, and Comunica Holdings.
RedstoneConnect CEO Mark Braund said: "The proposed disposal of our systems integration and managed services divisions represents another exciting development in the evolution of our business.
"Since the acquisition of Connect IB in 2016, we have been developing our smart software solution capabilities with a particular focus on OneSpace, our occupancy management software solution.
"We firmly believe that the significant global demand for workspace management solutions, coupled with the market-leading suite of services already being deployed within our software division, creates an ideal base from which to accelerate our growth.
"Our strategic focus on creating greater levels of recurring, annuity-based revenues, and improving the earnings visibility of the group, underpins the board's commitment to becoming a fast-growing workspace management software company, delivering long-term shareholder value."
RedstoneConnect announced the two sales at the same time as it published its financial results for the year ending 31 January 2018, which showed total revenue was up 15 per cent year on year to £47.57m.
The sale of the MSP and SI divisions will see the firm's revenue decline 89 per cent, leaving it with the £5.3m software unit.
The SI arm reported revenue of £24.21m and gross profit of £3.78m, while the MSP division reported a revenue of £18m and a gross profit of £5.14m.
The deal, which requires approval from shareholders, will see RedstoneConnect receive £19.6m up front from Excel IT, with a further £2m due on the successful completion of a project by one of Comunica's subsidiaries.
The firm said that with a software-only focus, it harbours ambitions to become the "leading international" workspace management software firm, and plans to invest in both organic and inorganic growth to facilitate this.
RedstoneConnect's share price rose over 37 per cent this morning.
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