Proventus Capital Partners has acquired Polestar in a pre-pack administration deal.
Toby Underwood, Matthew Callaghan and David Baxendale of PricewaterhouseCoopers were appointed joint administrators by the Polestar board today. The Group was immediately purchased by Polestar UK Print, an acquisition vehicle wholly owned by Swedish investment firm Proventus.
The Polestar UK Print board includes Proventus chief executive Daniel Sachs, alongside investment directors Henrik Bjerklin and Anders Thelin, who joined in January following Proventus' takeover deal.
The board of the new business will also include former Polestar Group director of sales and marketing John Ashfield, who left the business in 2005.
Polestar UK Print chief executive Barry Hibbert said the acquisition would ensure “continuity of service for all customers, as well as providing the opportunity to save as many of the business’ 2,000 full-time equivalent employees as possible”.
He said the board was forced to call in administrators, because of “the ineffective performance of our turnkey solution for Sheffield Web that began in 2014 as part of our major investment programme”.
Although not specifically mentioned by Polestar, this is understood to be reference to a rumoured claim against Goss following the installation of three of the manufacturer's web presses at Sheffield. However, speaking in December, when the claim was first mentioned, a Goss spokesman told PrintWeek that the press manufacturer “was not aware of any claim”.
In today's statement, Hibbert said that while the installation was now performing well, the group had to deal with delays, disruption to production and the “severe financial aftermath this has caused”. The company lists 24 “significant defects”, ranging from metallic faults, software construction and design issues.
“Polestar had been weathering a gradual downturn in the UK printing industry well and our positive decision to consolidate in Sheffield was intended to help still further our market-leading position,” Hibbert said.
“With shareholder support, management had been working tirelessly and constructively to try and find a satisfactory agreement with our turnkey suppliers for compensation.
“During this period we deliberately held our peace on the matter, for which the business suffered damage. We had to spend significant sums fulfilling orders and ensuring our contractual customers could be serviced. It soon became clear that we could not achieve a fair resolution in the timescale that our business’ finances urgently required.”
“After further cash investment in late 2015 and significant restructuring attempts, the quantum of the dispute has been too great.”
Polestar UK Print chairman and chief executive of Proventus Capital Partners Daniel Sachs said the company’s ambition when it stepped in before Christmas had been to avoid insolvency, but that “continued pressures” led to the need for the administration in order to “ensure a sustainable, sound and profitable enterprise again, in the interest of all stakeholder groups”.
“We believe that Polestar UK Print is a business with substantial long-term structural and strategic value and Proventus will work closely with management for the realisation of its full potential over time," he said.
“Having been introduced as a debt provider to refinance Polestar in 2015, we did not expect to find ourselves in this position today as owners. However, we believe that we had to step in and that the acquisition today will be in the best interests of all stakeholders.”
The deal went before the recently established Pre Pack Pool and was given a positive assessment, according to the company.
Polestar UK Print has bought the assets of seven Polestar locations: Sheffield, Bicester, Chantry, Wheatons, Stones and both Applied Solutions sites.
PwC's Underwood said: “Preserving value and maintaining the business was a key objective, given that it is critical for the group’s customers to have assured continuity of service.
“The transaction has avoided the uncertainty, cost and business damage of an open-ended administration process and was the only viable alternative for the business in the circumstances.”
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