Redcentric opens up on Calyx buy

MSP insists it only wanted the Managed Services unit for fear of going down "road to ruin" of buy-and-build model

Redcentric has revealed it was only ever interested in buying the Managed Services (MS) arm of Calyx for fear of going down the "quick road to ruin" of the buy-and-build model.

Last week, Redcentric snapped up Calyx MS from its new private equity firm MXC Capital, which recently acquired the company from its former backer Better Capital for £9m.

Before the Redcentric deal, MXC offloaded the Break-Fix Calyx business to Daisy Partner Services (part of Daisy Group) for £3.75m and Chess grabbed the Carrier Services arm for £1.8m. Redcentric's acquisition is expected to close on Monday once the other units have been officially disposed of.

Speaking to CRN, Redcentric's chief operating officer Fraser Fisher (pictured) said the company would not have been interested in looking at Calyx before it shed the other two units.

"We'd only ever be interested in the managed services business," he said. "We wouldn't be interested in [having] a volume break-fix business with lots of engineers across the country going around fixing things like Daisy does – it is not our model. We don't want to start bolting on lots of different bits and pieces because I think that is a quick road to ruin unless you do that really slickly and I have not seen anyone do that so far."

MXC Capital is the investment vehicle of serial channel entrepreneurs Ian Smith and Tony Weaver, the current chief executive of Redcentric. Fisher would not be drawn on how early his company was involved in talks to buy Clayx MS but did say MXC always intended it to be split up.

"It was a deal brought to us by our advisers MXC who had purchased Calyx with the intention of breaking it up because it – like a lot of other companies, [like] Maxima and Redstone – had a buy-and-build model with lots of disparate bits and pieces," he said. "They purchased it and broke it into three different bits.

"We wouldn't have approached it seriously until there was an opportunity to pick up a managed services business but I would not want to speculate as to whether we were involved in February, March or April."

Fraser said at the moment, half of Redcentric's business comes from new customers and the rest comes from new deals with existing customers.

He said any future acquisition would have to have a similarly strong renewals business.

"We've always said if there is an opportunity out there which is accretive to what we do – we have a good customer base that we know we can service well, we've got scale, we've got financial stability, we have happy customers – if there is more we can bring into the fold like that that sticks to what we do and has the same high percentage of recurring business... we would always look at things like that – never say never. There is not a big shopping list of stuff but equally if the right thing crossed our door, we would be silly not to."