Business signs manufacturer and designer files notice to appoint
Software Circle plc’s sale of Works Manchester Limited looks like it is collapsing.
Works Manchester has informed the company – until recently known as Grafenia – that it has filed a notice of intention to appoint administrators.
A notice was filed at the court in Manchester, through law firm Bermans, on Wednesday 6 December.
Software Circle confirmed in a statement that a first instalment on the sale was due on 31 May 2023, in respect of the purchase of Works Manchester, which never arrived.
A deal was initially agreed in May 2022 to sell the business for £3.165m to Rymack Sign Solutions, a privately owned company trading as PFI Group, based at Trafford Park.
That price was then dropped to £2.81m, but has since been reduced still further to £0.35m and the company is in the process of taking steps to recover it.
Trade publication PrintWeek has reported that Works Manchester is just the latest in a string of businesses owned by PFI Group to enter insolvency this year. Administrators have been appointed at other companies Sign Plus and its divisions Lofthus Signs and Jasmine, and both Signmaster and Futurama went into administration in May.
The Nettl Systems management team in Manchester 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, Software Circle said in a statement designed to reassure the stock market.
As announced on 15 September 2023, AIM listed group raised £23.4m to continue its acquisition strategy and drive long term shareholder value.
Software Circle said it is in exclusive discussions with acquisition targets with a collective turnover of approximately £3.6m and an adjusted EBITDA of £1.2m. These are progressing through the due diligence process.
In August TheBusinessDesk.com reported that the business was doubling down on its acquisition strategy with the aim of achieving growth and was developing an active deal origination process.
The business made four acquisitions during the financial year ending March 31, 2023.
In July Chairman Jan-Hendrik Mohr said: “I haven’t been successful yet but feel more positive than ever that our strategy of acquiring software companies is the best route forward to sustainable value creation.”