The Hoddesdon, Hertfordshire-based business was set up in July last year, following an investment in a Kolbus perfect-binding line.

However, due to the current financial climate, DPS decided the business was no longer financially viable and sold it in an MBO team, which included Diamond Hi-Speed head Howard Wilkins.

Peter Wight, sales director at DPS, told PrintWeek that the new owners had opted to close the company instead, with several staff moving back to DPS.

He said: "The management has decided that it is not a viable project and have decided to draw a line underneath it. It was sold for a very brief time. They were well financed, but the feeling was that, although they were prepared to take a risk, because of the low volumes in the web market they could not justify the investment.

"We have a certain amount of liability, we have a building we don't need. But we have been able to bring several staff back in. So far we have made five redundancies."

Wight added that he felt there could be an increase in the number of companies closing over the coming months, because he felt the industry had once again gone quiet.

He said: "The levels feel more like July than May and I can't see huge changes in the coming months. It has all gone quiet again and I think there will be a rash of closures, or companies are going to have to seriously rejig their cost base."