LONDON  - British IT services group Redcentric is working with a financial adviser on an attempt to sell the company, two people familiar with the matter told Reuters.

Redcentric, with a market value of 208 million pounds ($264.64 million), has lined up investment bank Lazard to sound out buyers for the business, the people said, speaking on condition of anonymity.

The mandate was awarded in January, one of the people added.

Several private equity funds with similar assets in the space have explored the opportunity of buying Redcentric in recent months, the people said.

Redcentric did not respond to a request for comment and Lazard declined to comment.

A private equity firm could use Redcentric, whose clients include broadcaster Channel 4, Heathrow Airport and the NHS, as a platform to buy and build across the IT services sector, one of the people added.

Redcentric's shares are up around 5.5% year to date, and have largely traded in line with the broad London market for the past two years, according to LSEG data.

The company posted a jump in revenue to 141.7 million pounds last year from 93.3 million pounds a year earlier, partly driven by acquisitions including 4D Data Centres, Sungard Consultancy and Sungard Data Centres, according to its latest preliminary results announcement.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 3% to 24.5 million pounds.

This is not the first time Redcentric has explored a formal sale process. It announced a sale process led by Stifel Financial Corp in 2020, although discussions with buyers did not materialise into any formal offers.

Speculation of a sale come amid increasing M&A activity in the IT services sector. Daisy Corporate Services earlier this month combined with Wavenet to create a 500 million pound company in terms of revenue. Private equity firm Hg last month made an investment in UK IT services provider Focus Group, valuing the business at $1 billion.

Redcentric provides public and private organisations with managed IT services including cybersecurity, communication and cloud computing. It was founded in 1997 and listed on the AIM market in 2013.

($1 = 0.7860 pounds)

(Reporting by Amy-Jo Crowley; Additional reporting by Alun John; Editing by Anousha Sakoui and Louise Heavens)