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Redstone / Castleton Technology

  • BY: Andrew Hore |
  • POSTED: 05/11/2013 |

Redstone is selling its cabling and projects business Comunica Holdings to Coms for £9.5m.

The initial £7.65m is payable on completion and £1.85m in a further 12 months. This will leave Redstone with cash of £3m before the deferred payment and an interest swap liability of £1.14m, which matures in September 2015. In April, Redstone demerged managed services provider Redcentric. There are potential liabilities relating to this and other disposals. 

The business being sold generated an EBITDA of £2.5m on revenues of £30.8m. This means that the deal is classed as a reverse takeover for Coms. There will be cost savings and cross-selling opportunities.

Redstone is left with the ferry software provider Maxima Information Group and the QAD enterprise resource planning systems consultancy businesses acquired with Maxima last year. The remaining operations generated EBITDA of £650,000 before central costs on revenues of £2.8m.

Redstone shareholders will vote on the proposed disposal on 21 November. Redstone will change its name to Castleton Technology and seek acquisitions in the software sector.

At 0.93p a share, up 0.05p, Redstone is valued at £5.8m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFOctober2013_49.pdf

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