Cloudy firm Coms Plc coughs £9.5m for Redstone
Our three year restructuring is now complete
The three-year restructuring at Redstone was effectively wrapped up today after management "conditionally" sold trading subsidiary Comunica for £9.5m in cash to LSE listed cloud-based telephony player Coms Plc.
Under the terms of the deal, Coms will cough £7.65m on completion and a deferred consideration of £1.85m in the next 12 months, providing that Redstone shareholders approve the deal.
In a statement, Redstone said the sale included the ICT infrastructure, data centre and smart building solution - which is pretty much the cabling arm, which it acquired in 2007 and the network campus business.
"The disposal marks the end of a restructuring phase that begun on my appointment in 2010," Ian Smith, Redstone CEO, said in a statement to the City.
When Smith and business partner Tony Weaver rocked up at Redstone three years ago it was on the cusp of administration after years of frenzied acquisition activity had left it with a morass of fragmented businesses.
In a bid to turn losses into smaller losses and then profits, the pair set about selling off or closing loss-making or non-core units. The BSF subsidiary was shuttered and the tech unit in Ireland, and the PBX arm, were offloaded.
The last remnants of Redstone - MIG, a software developer that makes proprietary ERP, reservation and payroll wares, and a QAD software consultancy from last year's buy of Maxima - will continue but under the new proposed brand name of Castleton.
The managed services side of Redstone and Maxima were hived off earlier this year to form Redcentric, which itself listed on AIM alongside Redstone.
Redstone is the seventh buy that Coms plc has made with others including very small assets. In interim results for the half year to 31 July, it turned over £2.47m from £0.78m in the previous year, and reported a loss for the period of £119k, better than the £337k loss in H1 2012.
In the year to 31 March 2013, Redstone made an EBITDA of £2.5m on sales of £30.8m. ®