Printing industry news: pre-pack deal as A4 Laser Labels acquires CF Labels
Print Week’s Richard Stuart-Turner has reported on a pre-pack deal to save a label printing company from going to the wall.
He reported: “Self-adhesive label manufacturer CF Labels has been acquired by connected party A4 Laser Labels in a pre-pack deal. Mike Dillon and Katy McAndrew of Leonard Curtis Business Rescue & Recovery were appointed joint administrators of the New Mills, High Peak, Derbyshire-based business on 26 March 2021.”
The trade publication said that in a statement to Print Week Leonard Curtis said the business – which was established in 2007 – had entered administration as a result of a bad debt and the ongoing impact of the Covid-19 pandemic.
The statement read: ““Despite a number of cost-cutting measures the company fell behind with its financial obligations and professional advice was sought. As a result, the appropriate steps were taken to preserve the business. After a period of marketing the administrators concluded a pre-packaged sale of the business to a connected party, resulting in the safeguarding of 19 jobs.”
In a story of our times the struggling label company was hit by a £200,000 bad debt and despite making savings and some redundancies an acquisition was the best solution. HMRC is owed £166,000 in respect of VAT and £71,000 in respect of PAYE/NIC. The company owes its largest supplier around £237,000 and had entered into a payment plan with the supplier to repay a minimum of around £4,000 per week, which was deemed unsustainable said Print Week.
Ian Carrotte of ICSM said: "These are desperate times with major firms going to the wall. Every firm like a Debenhams collapses hundreds of suppliers face losing money as their invoices are not paid. Each time a big firm crashes it will take others with them - and this deal is perhaps the best there can be in the circumstances. It is what a pre-pack was designed for."
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk