Redstone sells security business

Managed services provider Redstone has sold its security software and consultancy business to its management for a total of £1m. Redstone has received £100,000 on the signing of the deal and will get a further £400,000 when the sale is completed. The rest of the cash will come from realising the net current assets of the business, which will be retained by its former owner, and from loan notes redeemable by 31 March 2011.This business generated revenues of £9.2m in the year to March 2010 but made no significant profit contribution. The proceeds of recent disposals is estimated to be £7m by house broker FinnCap. Along with a £8.5m fundraising this should leave Redstone with a significantly reduced debt position by the end of March 2011. Redstone is left with its core business.