Managed services provider CloudCoCo has announced plans to sell its IT services business to Aspire in a £9.2 million ($11.9m) deal that will help the company pay off its debts.
The deal will see the entire sale of CloudCoCo Limited, the group’s IT managed services business.
The company, which is based in Leeds, UK, added it is in advanced discussions to sell Connect, its data center business, which includes colocation and data center services delivered from 32 UK-based facilities.
The sale is expected to close at the end of the month.
Proceeds from the sale will be used to cover all the group’s liabilities, with approximately £950,000 ($1.2m) in cash left over for working capital.
Following completion, CloudCoCo will deliver enterprise-grade, on-demand IT products and services via its two wholly-owned subsidiaries: Systems Assurance and More Computers (MoreCoCo).
Simon Duckworth, non-executive chairman at CloudCoCo, said: “The proposed sale of our IT managed services business marks a positive step for the group, enabling us to eliminate long-term debt and focus on expanding our value-added reseller operation, particularly in e-commerce, where we see significant opportunity. Alongside this, we are in advanced discussions for the sale of our Connect business to further strengthen our financial position and streamline our proposition.”
In its June 2024 interim report, CloudCoCo reported pre-tax losses of around £1.19 million ($2.4m). The company has been working to refinance its loans, including loan notes with MXC Guernsey Ltd, which were originally due to be repaid in October 2024.
The company said that as a result of customers rationalizing physical and on-premise services, it had seen a steady downturn in new connectivity and data center opportunities.
At the time, interim CEO Ian Smith said the results did not "reflect the period of my tenure," but said they highlighted "a number of the challenges that the business faces and which we will work on resolving to ensure the company can meet its liabilities and is able to look to the future with confidence.”
Smith was formerly CEO at MXC Capital and assumed his role as interim boss at CloudCoCo after founder and former CEO Mark Halpin stepped down in March 2024. Halpin now works as a sales and marketing director at SCC Digital.
Aspire is a managed IT servicees and cyber security provider, specializing in cloud, connectivity, and IT support services. The company currently has offices across the UK in Gateshead, Glasgow, Stockton, and London.