Redcentric 'in discussions' over potential sale

MSP confirms discussions with Macquarie private equity and Six Degrees regarding potential sale

AIM-listed Redcentric has confirmed rumours that it is considering a sale.

The scandal-hit managed service provider has launched a formal sale process after its fiscal 2020 left it in an "excellent" position to explore further opportunities to increase value for its shareholders, according to a statement released in response to media speculation.

However, it noted that it is also considering its own M&A and organic growth as other means in which to increase this value.

"The board of Redcentric notes the recent media speculation and confirms that it has initiated limited discussions with third parties with a view to seeking a potential purchaser or purchasers for the company," it said.

"Whilst a potential offer for the company may be the outcome of a formal sale process, the company is alternatively evaluating potential options in relation to organic growth and/or potential acquisitions that might be made by the company."

The MSP confirmed that it is in informal talks with private equity firm Macquarie - who snapped up KCOM last year - and Six Degrees. It is open to talks with other parties as long as they remain anonymous and sign non-disclosure agreements. Redcentric expects any possible sale to conclude by Q4 of this year.

"It should be noted that, as at the date of this announcement, the company has not received any form of approach or indicative proposal to acquire the company, either pursuant to the company-initiated discussions or otherwise," it stated.

"There can be no certainty that any offer will be made for the company, nor that any transaction will be executed, nor as to terms of any such offer or transaction."

Redcentric has been plagued in recent years by an accounting scandal, and it recently agreed on a settlement with the Financial Conduct Authority (FCA) to pay shareholders back £11.4m.