Lexington Corporate Finance (“Lexington”) is pleased to announce that it has acted as the Corporate Finance Advisor to the Shareholders of RedCortex Limited (“RedCortex”), a leading digital and cloud-based transformation consultancy, on its sale to AIM listed TPXimpact Holdings PLC (“TPXimpact”). The deal values RedCortex at a total of £13.4m with the business having generated £4.4m turnover and £0.8m EBITDA in its most recent set of financial results.
RedCortex, established in 2016 and based in Cardiff, specialises in providing technology services to the Welsh Public Sector, particularly focused on healthcare and transport alongside Government and local authority projects. Its clients include NHS Wales, the Welsh Government, Transport for Wales and a number of local authorities as well as other public sector institutions outside of Wales. RedCortex is a Microsoft Gold Partner with deep knowledge and skills right across the Microsoft stack.
TPXimpact is a digitally native technology services group focused on sustainable digital transformation and positive, purposeful organisation change. The group is recognised as a leading alternative digital transformation provider to the UK public services sector, with c.75% of its client base representing the public sector and c.25% representing the commercial sector. TPXimpact is on track to deliver turnover in excess of £75m in the year to March 2022.
The acquisition of RedCortex will strengthen TPXimpact’s foothold in Wales and expands on the Company’s strategy of building regional hubs across the UK.
Lexington acted as the lead advisor and presented the opportunity to a number of potential acquirers. TPXimpact emerged as the stand out strategic acquirer for the business and provides a home for the RedCortex business to thrive. The Lexington team of Nigel Griffiths, Thomas Edwards, Pablo Shorney and Jade Burgess together managed interactions with all the potential acquirers, negotiated terms and steered the process through to a successful completion.
Martin Britton and Martyn Matthews said: “Lexington really helped us through this process, providing invaluable advice at every step and helping make sure we achieved a good valuation for RedCortex. The Lexington team made sure the transaction ran smoothly and kept us informed at every stage.”
Pablo Shorney, Senior Manager, said: “It was a pleasure for Lexington to work with the Shareholders to help deliver such a positive result. Martin and Martyn have successfully built a fantastic business, scaling the Company significantly and delivering exceptional quality since incorporation in 2016. TPXimpact’s culture, strategy and reputation for purposeful organisational change is strongly aligned with that of RedCortex, providing a strong platform for the Company to continue to develop and deliver on its ambitious growth plan.”
Thomas Edwards, Director, added: “This is another great example of an outstanding result in the Welsh technology sector. There was significant interest in the business that represented the reputation of RedCortex in the marketplace. This is a strategic acquisition for TPXimpact and will only further enhance the quality of the service offering to its clients.”
Legal advice to the Shareholders was provided by Tom Kelleher and Jordan Thomas at Capital Law.