Pre-pack deal saves 430 jobs at The Pexion Group

Chorley-based engineering group Pexion Group has been saved in a pre-pack administration deal yesterday, with most of the businesses moving over to a company owned by Baaj Capital.

Richard Harrison and Howard Smith, from Interpath Advisory, were appointed joint administrators to 14 companies across the Chorley-based Pexion Group yesterday (March 19), in a deal that has saved 430 jobs.

The Pexion Group was acquired in January last year in a deal valued at £34m by London-based investment firm RDCP Group, which gave it a 75% stake in the £55m turnover and £7m EBITDA business.

RDCP had also provided Pexion with a £15m acquisition facility to support bolt-on acquisitions and grow EBITDA to more than £20m within five years.

In addition, Stuart Irwin and Richard Harrison were appointed joint administrators over another group subsidiary, Nitronica Limited, on the same date.

The Pexion Group specialises in the design, development and manufacture of high specification precision, subtractive, additive, fabricated and electronic components and sub-assemblies for high-tech industries including aerospace, automotive, medical and general industrial sectors.

The group consists of a parent company, Pexion Limited, and 14 trading subsidiaries.

Over recent months, the group had experienced challenging trading conditions and had started to come under increasing financial pressure from its suppliers.

This, in turn, put pressure on the group’s liquidity position. In response, the directors sought to undertake a review of the sale and restructuring options available to them, but when a solvent solution could not be found, they took steps to seek the appointment of administrators.

Immediately following their appointment, the joint administrators completed six separate transactions which safeguards the future of 13 of the group’s operating subsidiaries, and preserves 430 jobs at sites across the country. The transactions include:

• The sales of Pexion Limited (based in Chorley), Rictor Engineering Limited (based in Denton), Alan Gordon Engineering Limited (based in Chorley), Paragon Precision Limited (based in Hull), SKN Electronics Limited (based in Birmingham), HT Tooling Solutions Limited (based in Manchester), Elite Tooling Solutions Limited (also based in Manchester) and Oxton Engineering Limited (based in Birkenhead) to a company owned by Baaj Capital. A total of 144 people have transferred to the purchaser as part of the transaction.
• The sales of Nitronica Limited (based in Ballynahinch, Northern Ireland) to Hinchtech Limited and Simtek EMS Limited (based in Margate) to Westwood EMS Limited. A total of 174 have transferred to the purchasers.
• The sales of Claro Precision Engineering Limited (based in Knaresborough) and Drurys Engineering Limited (based in Hitchin) to Amcomri Group Limited, with 76 members of staff transferring to the purchaser.
• The sale of Precision Engineering Pieces Limited (based in Tewkesbury) to Geometric Manufacturing Limited, with 38 members of staff transferring.
• The sale of Clitheroe Light Engineering Limited (based in Clitheroe) to Bryden Venture Engineering Limited with a total of 25 employees transferring as part of the transaction.

Phasa Limited, based in Newmarket, is not included as part of these transactions and as a result, the joint administrators will take steps to wind down this business, with the loss of four jobs.

In addition, the joint administrators have made 13 people employed by the parent company, Pexion Limited, redundant. The joint administrators will be providing support to all those impacted by redundancy, including supporting them with claims to the Redundancy Payments Service.

Richard Harrison, joint administrator and managing director at Interpath Advisory, said the six transactions will safeguard the future of 13 of the group’s operating subsidiaries, including saving 430 jobs.

“Pexion is a highly diversified group which supplies some of the world’s largest OEMs (original equipment manufacturers) and tiered supply chain providers across key industries including the aerospace, defence and automotive sectors.

“The complexity of the group, coupled with the financial challenges it was facing, meant there was a requirement to complete six separate transactions to a very short timetable. As such, we are enormously grateful to the very many stakeholders who worked collaboratively with us to get these transactions over the line.”

Established in 1986, the Pexion Group is a diversified group of high value precision and electronic engineering businesses.

The business offered a one-stop engineering solution to some of the world’s biggest original equipment manufacturers and tiered supply chain providers.