Barclays loses ‘millions’ in Latitude pre-pack deal
ONLINE marketing company Latitude Group has been bought by its management team in a pre-pack administration that has resulted in its bank losing millions of pounds.
Toby Underwood and Dermot Power of accountancy firm BDO was yesterday appointed as joint administrators to Latitude Group.
The Warrington-based business was then sold in a pre-pack deal back to its management team and private equity firm Vitruvian Partners, the existing major shareholder, who have set up Latitude Digital Marketing Limited.
As part of the pre-pack, Barclays has agreed to write-off loans it had provided to help finance Vitruvian’s £55m acquisition in 2007. Around £5m of Barclays’ £10m loan was left outstanding, according to reports.
The company said the new deal would see “millions” of new investment from the management team and Vitruvian Partners as it grows its digital marketing services.
No explanation was given for the insolvency, other than that the marketing sector as a whole had endured a tough year and that economic conditions had impcted on the company’s financial structure.
Alex Hoye, chief executive of Latitude, said: “This deal secures Latitude’s ability to innovate and grow in a disruptive market. Marketing spend online surpassed TV for the first time in the UK this year – advertisers’ continued shift of expenditure to digital services provides growth opportunities for firms like Latitude in any economic environment. We share a vision with our investors on how to take the business forward, building on investments we have made in 2009.”
Ian Riley from Vitruvian Partners said: “The marketing services sector has had a difficult time in the last 12 months. However, Latitude is a market leader and innovator with a talented management team. Vitruvian remains supportive of Latitude’s strategy.”
Toby Underwood, business restructuring partner at BDO, said: “Despite a strong business model, the wider economic conditions had an adverse impact on the financial structure of the company.
“We are pleased to have protected all 97 jobs and secured the sale of the business and assets of the company, allowing it to deliver its growth potential.”
The company was recognised as the fifth largest company on the Sunday Times Tech Track 100 in September 2009.
