MXC Capital raises £10m in Redentric share sale

MXC Capital has raised £10.44m after selling 5.8million shares in Yorkshire IT services business Redcentric.

The technology focused merchant bank was an original shareholder in Redcentric at the time of its demerger from Redstone and subsequent IPO and has supported the company in identifying and executing accretive M&A opportunities while acting as a cornerstone investor in each of its public funding rounds.

The original cost of MXC’s investment in Redcentric was £3.4m, and said the disposal will result in a realised gain of £7.04m.

Following the disposal, MXC holds 49,108 shares and 8.7 million options over shares in Redcentric, of which 1.7 million are exercisable at 32 pence per share and the remaining 7 million are exercisable at 80 pence per share.

Tony Weaver, founder of MXC, will remain on the board of directors of Redcentric as a non-executive director, having stepped down from the role of CEO in November 2015.

MXC Capital Markets continues to act as financial adviser to Redcentric.

For the year ended March 31 2016, Redcentric reported profit before tax of £7.4m. Net assets at March 31 2016 stood at £97.5m.

MXC said: “The proceeds of the disposal will be utilised in line with the company’s stated strategy of returning net proceeds of realisations after retaining sufficient investment capital in the business.”