Redstone sells Irish reselling business to PFH

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Redstone sells Irish reselling business to PFH

Microscope contributor

Redstone has offloaded its Irish reselling operation to PFH Technology group for £2.25m as it continues to re-shape the operation into a managed services provider.

The sale of Redstone Technology, which was predicted by sources several weeks ago, includes the entire business, undertaking and trading assets but not the property or inter-group indebtedness.

"We are pleased to have completed another stage in delivering our strategy of refocusing Redstone's operating activities," said chief executive Tony Weaver. 

The aim is to a "network-based, end to end, managed data services and applications providers to the UK mid market," he added.

Since pitching up at Redstone, Weaver and Chairman Ian Smith have sold the PBX maintenance business to Maintel, backed away from the BSF market and raised £8.5m from a round of fund raising.

The integrator will retain roughly £300,000 in cash from the sale. A cash consideration of £2m will be paid when the sale to PFH is finalised with the balance due on the first anniversary of that date.

The Irish operation resold enterprise storage, servers and professional, consulting, logistics and maintenance services throughout the country. It has services staff and spare parts inventory in eight locations including Dublin and Cork.

In the 12 months to 31 March 2010, Redstone Technology made an adjusted EBITDA of €400,000 (£348,000) and profit before tax of €70,000 (£61m), on the back of sales of €10.9m (£9.49m) as the Irish IT market contracted.

The sale leaves Redstone with debts below £5m which is significantly lower than the £20m recorded at the end of the calendar first quarter.

This is the second acquisition undertaken by PFH this year following the purchase of the Irish arm of Siemens Enterprise Communications in May; both deals were funded from internal capital, according to the firm.

"This is a strategic deal for PFH which significantly strengthens our position at the upper end of the market for high-spec enterprise storage and server solutions," said Paul Hourican, PFH chief executive.


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