UK managed services provider Redcentric has sold off its data center business.

This week, the company announced it had agreed the sale of its data center unit, Redcentric Data Centres Limited, to Stellanor Datacenters Group Limited, a UK data center operator launched last month and backed by a fund managed by DWS Group.

The all-cash deal for Redcentrics’s entire data center operation was based on an enterprise valuation of up to £127 million ($169.5m), depending on certain conditions.

Michelle Senecal De Fonseca, Redcentric CEO, said: “We are pleased to announce today the disposal of RDC to Stellanor, which is a positive outcome for Redcentric and our shareholders. The completion of the DC sale will allow management to focus squarely on the MSP business, which has a very strong brand and market position in both the public and private sectors.”

“I am excited at the prospect of driving revenue and margin expansion in the years ahead, which I am confident we will deliver strong returns and shareholder value,” she added.

Redcentric’s portfolio of data centers currently totals eight facilities with 41MW of capacity. Today, Redcentric offers services from sites in London (x2 – Shoreditch and Hounslow), Woking, Gatwick, Byfleet, Reading, Cambridge, and Elland in West Yorkshire.

The company first announced its intention to find a buyer for its data centers in August.

Newly-launched Stellanor, owned by DWS, currently operates two data centers in London. The company is led by CEO Stephen Scott, who has had roles at Global Switch, Verge Digital Infrastructure, Asanti, Sentrum, Virtual1, and a number of other technology services firms.

Aparna Narain, partner at DWS Group – Infrastructure Investments, added: “The acquisition of RDC by Stellanor represents a transformative step in expanding our UK footprint with high-quality, strategically located assets with 23MW of secured grid capacity and a blue-chip customer base. RDC’s well-invested facilities and proven operational excellence align seamlessly with our vision to deliver scalable, secure data center solutions amid rising demand for edge computing in the UK. We look forward to integrating these operations into Stellanor to drive innovation and superior service for our combined clients.”

Founded in 1956 and formerly known as Deutsche Asset Management, DWS is a German asset management company. It previously operated as part of Deutsche Bank until 2018, when it was listed on the Frankfurt Stock Exchange. Deutsche Bank retains a majority stake in the firm.

The firm currently owns European operator atNorth, which has data centers across the Netherlands, Switzerland, and Germany. DWS is reportedly looking for a buyer for atNorth. The firm has also invested in Mediterra, a data center firm focused on southern Europe that launched last year.

Stellanor launches

DWS recently acquired two data centers in the UK from Colt Technology Services. Colt acquired the sites when it bought Lumen’s EMEA operations in November 2022, which included a number of former CenturyLink/Level 3 locations.

The two facilities have now been used to seed Stellanor, which launched in September.

The company’s London East data center, launched in 1999 and located at Level 36 Braham Street, is a former Level 3 facility offering 8,000 sqm (86,110 sq ft) of technical space and 4MW of capacity over five floors.

London North, (aka Moreland House) at 260-262 Goswell Road in Angel, offers 8MW across 12,210 sqm (131,430 sq ft). Opened in 2000 as another former Level 3 facility, the company says the site can be built out to 20MW across 25,145 sqm (270,650 sq ft). The site was once home to a Gordon’s Gin distillery in the late 1800s/early 1900s, with the current building constructed in the 1950s.

Stellanor has said it aims to grow further through a “combination of further M&A and greenfield projects.”

“This acquisition marks the beginning of an exciting new chapter. Our priority is to keep customers at the heart of everything we do as we expand the business. Continued investment in our product portfolio and the data center infrastructure that underpins our business will be fundamental to delivering on our vision,” CEO Scott said last month of Stellanor’s launch with the former Colt assets.

Redcentric had built up its portfolio of facilities via the acquisition of UK colocation provider 4D Data Centre in 2022, as well as the acquisition of three Sungard data centers in the UK the same year. They were rebranded under the Redcentric Data Centres name.

4D operated a 603 sqm (6,500 sq ft), 1MW data center in Byfleet, Surrey, that opened in 2008, as well as a 929 sqm (10,000 sq ft), 3MW facility in Crawley, West Sussex, which it acquired from BT in 2016. The company also leased space in a Telehouse facility in London and a Custodian facility in Maidstone, Kent.

The Sungard deal saw the company take over London Hounslow LTC Data Centre and Recovery Centre, along with the Woking TC3 facility, and the Elland TC4 Data Centre and Recovery Centre.

Prior to these acquisitions, Redcentric operated four data centers in the UK in Harrogate, London, Reading, and Cambridge, totaling more than 4,650 sqm (50,000 sq ft). Redcentric bought the City Lifeline data center in London for £4.8 million ($6m) back in 2016.