Service Point UK in administration

By Jo Francis, Monday 28 April 2014

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Service Point UK has been placed into administration ahead of an anticipated pre-pack sale of the business.

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Service Point UK: pre-pack sale appears to be likely outcome

Ernst & Young has confirmed that Angela Swarbrick and Alan Michael Hudson were appointed joint administrators over Service Point UK on Friday (25 April).

In a statement, the joint administrators said: “The nature of the offers received and the quantum of the liabilities in the Company meant that a sale process of Service Point UK was only achievable via an administration process.

"The business has already been widely marketed. The joint administrators have identified a purchaser for the trade and assets of the business and are working towards securing a sale within a short timeframe. This should minimise the time that the business is in administration and preserve value.”

PrintWeek understands that Paragon Group has emerged as the most likely purchaser for the firm, and is understood to be in the process of completing due diligence.

Paragon chief executive Patrick Crean was unavailable for comment at the time of writing.

A deal to take over Service Point would mark a new area for the £141m turnover, pan-European Paragon operation, which provides a range of specialist print and fulfilment services to major brands.

The Service Point UK business was put up for sale earlier this year after its parent company, GPP Capital PLC, was itself placed in administration when GPP’s Spanish parent company Service Point Solutions was unable to restructure its £100m debt.

Service Point UK has a network of 27 locations across the country, and provides reprographic, document management and print management services.

The business had sales of £40.4m in 2012, and made an operating profit of £78,000 although this was wiped out by charges and write-offs connected to its parent company, resulting in a bottom line loss of £3.5m.

It employs around 500 staff.

Any possibility of a going concern sale was deemed unlikely because of the liability attached to Service Point’s pension scheme, which was £9.3m in the 2012 accounts.

The situation for trade creditors is unclear. One told PrintWeek: "I'm being told it's business as usual but I want to know if I will be paid. That is my big concern."

Xerox is understood to be Service Point UK’s biggest trade creditor.

Separately, US-headquartered online print specialist Mimeo has acquired Koebcke, Service Point’s German operation, which also went into administration due to the issues at the Spanish parent group.

Koebcke has a major production hub in Berlin and was rated as the third-biggest producer of photobooks and photo merchandising in Europe.

Mimeo added its first European manufacturing facility in 2011 when it acquired CLE.

 

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