Reflex buys administration-hit Fusion
Friday, November 2, 2018
Reflex Labels has bought Fusion Flexibles in a pre-pack administration deal after the packaging manufacturer succumbed to mounting cashflow pressure.
Raj Mittal and Steve Stokes of FRP Advisory were appointed joint administrators for Leicester-headquartered Fusion on 30 October, despite attempts by the firm's management to save the business with fresh cash injections in the preceding months.
FRP approached Reflex as a potential purchaser prior to its appointment at Fusion. Reflex chief executive Ian Kendall said his business was one of around four courted to buy the business as part of an accelerated sale process to preserve the business and jobs. The sale was completed on the same day that FRP was appointed as administrator.
Mansfield-headquartered Reflex has acquired the entirety of Fusion’s business and assets, and took on all 134 staff from Fusion's two sites, the main facility in Leicester and its 46-staff Kirkby-in-Ashfield, Nottinghamshire operation.
Kendall said: “We had been in the process of acquiring other businesses when we were approached by FRP and the transaction took place so quickly that we put our other acquisitions to one side in order to engage with this process.
“Now we are in the process of taking a look at the business in terms of both finance and people and trying to stabilise things. We are speaking to suppliers and clients to offer reassurance.
“It’s going to be our fastest acquisition – and we still have to do a lot of our due diligence – but our general goal is to continue with business as usual and continue on with this, and other, acquisitions to be a great British supplier in the labels and packaging sectors.”
Fusion, which was formed in a merger of Mansfield-based CPS Flexible with Ashfield-based Mercury Packaging, will continue to trade under its own name for the time being, although Kendall said the intention was to bring it under the Reflex brand within a year.
Reflex’s headcount now tops 850. The acquisition of Fusion is expected to add £14m to its projected turnover for the year, now estimated at £135m.
The group will continue on its M&A trail for the rest of the year, which started in January with the acquisiton of Grimsby-based Kingsway Printers.
Raj Mittal said: “This transaction demonstrates the continued appetite for consolidation in the packaging industry, but also the impact of wider economic factors on manufacturing businesses in the UK, such as rising raw material pricing and overhead costs.
“We are pleased to have completed the sale to Reflex and to have secured the future of the employees.”