Redcentric re-centres itself with £127m sale of datacentre arm

Funds will go towards the LSE-listed firm’s MSP growth strategy

Redcentric has agreed the sale of its datacentre business, Redcentric Data Centres, to Stellanor Datacenters Group for £127m.

The buyer is a UK datacentre operator backed by a fund managed by DWS Group.

The number 25 ranked Top VAR has had a transformative year, naming Michelle Senecal De Fonseca as its new CEO in May.

FY25 marked a milestone in Redcentric’s transformation strategy with the separation of its two core business entities, datacentres and its managed services provision.

Revenues also grew 4.2 per cent to £170m in a pre-close trading update for the financial year ended 31 March 2025.

Now with the two divisions separate, and Redcentric Data Centres sold, the LSE-listed group can now focus on its managed services operations.

“The completion of the DC sale will allow management to focus squarely on the MSP business which has a very strong brand and market position in both the public and private sectors,” said Senecal De Fonseca.

“I am excited at the prospect of driving revenue and margin expansion in the years ahead, which I am confident we will deliver strong returns and shareholder value."

The transaction is expected to legally complete by the end of May 2026.

Return of the managed services provider

Redcentric historically operated as a 'pure play' provider of managed IT services.

This changed in 2021 when it embarked on a mission to add capability and scale through what ended up as five acquisitions, culminating in the purchase of Sungard's datacentre assets in July 2022.

These acquisitions significantly increased the group revenue derived from datacentre services, shifting the company's focus from being a pure play MSP business to one that combined MSP with datacentre capabilities.

But recognising the different business models, markets, financial characteristics, capital requirements and valuation metrics between the two entities, the Redcentric board concluded that splitting the group into two distinct segments would provide greater transparency on the performance and profile of each core operating business.

It therefore established Redcentric Data Centres (RDC) as a new trading subsidiary to hold the trade and assets of the group's datacentre business, which were agreed to be transferred on 31 January 2025.

For FY25, the datacentre arm generated revenues of £44.6m.