Rymack Sign Solutions, which trades as PFI Group, agreed to buy Works Manchester from Software Circle (then Grafenia) in May 2022, in a deal that was worth nearly £3.17m at the time.
However, PFI failed to meet the first substantial deferred consideration payment that was supposed to be paid on the anniversary of the sale.
More than six months on, the situation remained unresolved, and Software Circle has been forced to write off more than £2.2m due to PFI’s failure to pay.
This morning (7 December) Software Circle announced that it had been informed about the NOI.
“The Company is in the process of taking steps to recover the sums due and will update the market again in due course,” Software Circle stated.
“The Nettl Systems management team have been making arrangements with alternative suppliers so that continuity of supply is in place for products available through the Nettl Systems platform to minimise any impact on the Nettl partner network. Migration of product supply has begun and will be completed in the coming days.”
Nettl Systems was a key customer of Works Manchester.
The sale of Works Manchester included the production operation of Grafenia Operations. The combined manufacturing business had gross assets of approximately £6.8m. Printweek understands around 90 people work at the operation.
PFI also took on finance lease liabilities of £2.1m as part of the deal.
In 2019 Grafenia replaced three B1 litho presses with a new hi-spec 15,000sph Komori Lithrone GL840P H-UV press, in a £2.1m spend that included a CTP upgrade.
Works Manchester generated sales of £6.6m and a pre-tax loss of £300k in the pandemic-impacted year to 31 March 2021. Updated accounts for the combined entity are not available.
Since selling Works Manchester Software Circle has focused on acquiring software businesses serving vertical markets.
Printweek has approached McMurray for comment. He has not responded to requests for comment since August, when Mardan Products was shuttered.
Works Manchester is the latest in a string of PFI businesses to enter insolvency this year. Last month administrators were appointed at Sign Plus and its divisions Lofthus Signs and Jasmine. After a period of limbo administrators were also appointed at Signmaster.
Another group company, Kesslers London, was sold to an MBO team at the end of last month in a solvent sale.
Futurama went into administration in May.