The new owner of Advent Colour, the circa £8m turnover Andover-based commercial printer sold in a pre-pack deal a month ago, has been revealed in documents filed at Companies House.
ReSolve Capital, a corporate restructuring business, is the backer of DMA Print.
DMA Print was formed on 24 April, one week before Advent went into administration. DMA shares four directors with Advent Colour.
ReSolve’s involvement in the £50,000 deal is revealed in proposals filed at Companies House by joint administrators Carl Jackson and Paul Goddard of Quantuma.
Unsurprisingly, Advent’s creditors include many of the industry’s major suppliers.
It also operated an invoice factoring facility with Bibby with a gross debtor ledger totaling £1.4m, though the administrators anticipate its full approved ledger of £1.2m will be collected in full.
Most of Advent’s plant and machinery is subject to agreements with finance companies, with outstanding sums totalling more than £2.2m.
The largest creditors by value are Close Brothers Asset Finance (£1.64m), Bibby (£931,132), HSBC Equipment Finance (£342,964), Lombard Asset Finance (£232,600), Southern Paper (£195,213), Denmaur Papers (£182,343), Heidelberg (£171,691), Antalis (£99,275), Howard Smith (£77,540), and Robert Horne (£76,142).
A meeting of creditors is due to take place tomorrow (30 May) at 10am at the Holiday Inn Southampton.
Advent’s assets were valued before the sale at £123,800 in-situ and £9,400 ex-situ based on a 90-day exit period. The difference in the valuations was largely accounted for by the estimates of goodwill, valued at £100,000 in-situ but nothing after 90 days.
The administrators said an independent agent, SIA Group (UK), had approached several contacts in the print industry before the pre-pack, but none expressed an interest in buying Advent.
Therefore, they accepted the only offer they received, of £50,000 from DMA Print, which was “significantly in excess of the value achievable from a sale on a break-up basis”. ReSolve has taken a 55% share in Advent Digital Imaging, the holding company for the new business.
The administrators said the pre-pack was the best option because it was unlikely the company could have provided enough funding to a CVA while continuing trading, it had no funds to trade through a period of administration, and it would have ceased to trade if placed into compulsory liquidation following a winding-up petition.
The report also reveals the full circumstances leading to Advent’s fall into administration and the pre-pack deal.
In tandem with its major lender, Bibby, the company had sought advice from another firm of insolvency practitioners to help in the preparation of a CVA. Advent’s directors had also been in talks with a competitor regarding investment in the business.
Quantuma was then formally appointed on 19 March to assist the directors with the CVA. Following this, however, Advent came under increased pressure from creditors and the competitor withdrew its interest in early April.
The administrators said they discussed a pre-pack sale of Advent’s assets at a meeting with its directors on 4 April, but they were “keen to ensure the existing company survived and a CVA was proposed to creditors”.
Shortly after this, one of Advent’s directors was introduced to ReSolve, which was interested in investing in Advent’s holding company.
However, demands from creditors became more pressing during April – one issued a winding-up petition for a debt of £28,000 on 9 April – and in late April it “became apparent” that the terms of a proposed CVA (less than 20p per £ over five years) “would be unlikely to be acceptable to creditors”.
Terms of the pre-pack, which was supported by Bibby, were agreed on 30 April and Advent placed into administration on 1 May.
The report also states that Advent’s problems date back to delays in bringing more of its finishing capability in-house following an acquisition in 2011.
Advent bought the machinery, stock and customer database of a competitor for £1.3m in 2011, and planned to start operations from a new site in December of the same year. However, the landlord discovered asbestos in the building, before falling into receivership in 2012, and Advent didn’t begin trading from the site until February 2013.
By this time Advent was “not generating the expected turnover (to match its increased cost base), which was beginning to cause cashflow issues”, according to the administrators.
ReSolve was unable to comment on its plans for Advent at the time of writing.