Redcentric is returning to its roots as a pure-play MSP after agreeing the sale of its data centre business.
The LSE-listed outfit this morning confirmed it is selling its eight data centres to Deutsche Bank-backed Stellanor for an enterprise value of up to £127m.
Redcentric’s shares surged in August when it confirmed press speculation that a deal for the business – which generated adjusted EBITDA of £16.6m on annual revenue of £44.6m in fiscal 2025 – was close at hand.
The carve out will leave Redcentric with a pure-play midmarket managed services business with an adjusted EBITDA and revenues of £18.8m and £135.1m, respectively.
“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,” stated Redcentric Michelle Senecal De Fonseca, who was appointed CEO in May.
It’s done with its data centre dalliance
The deal means Redcentric’s odyssey as a sizeable data centre player will be over inside five years.
Having historically operated as an MSP, in 2021 Redcentric commenced a strategy of adding capability and scale via M&A. It went on to make five acquisitions, including that of Sungard’s data centre assets in July 2022.
These acquisitions shifted its focus from being a pure-play MSP to one that combined MSP and data centre capabilities.
But it wasn’t long before Redcentric concluded that the two businesses were better apart.
In late 2024, its board opted to create two autonomous business units with their own dedicated management team and resources.
Mid-tier market position in MSP
Redcentric’s remaining MSP business serves 1,500 customers across the public and private sectors.
Specialising in the provision of cloud, communication and network capability, it generates 90% of its top line from recurring revenues.
“The Board believes that the Group’s market position as a mid-tier provider sitting between a small number of very large providers and a significant number of quite small providers is highly attractive,” Redcentric stated.
Set to close by May 2026, the £127m deal values Redcentric’s data centre business at 15.1 times EBITDA.
Stellanor – which is backed by Deutsche Bank’s asset management business DWS – last month acquired two data centres in London from Colt that serve around 120 businesses.
It is aiming to become the “leading national enterprise, wholesale and AI colocation platform in the UK and Nordics” via M&A and greenfield projects.
“The acquisition of RDC by Stellanor represents a transformative step in expanding our UK footprint with high-quality, strategically located assets with 23MW of secured grid capacity and a blue-chip customer base,” stated Aparna Narain, Partner at DWS Group – Infrastructure Investments.
