Midlands based business Calder Colours (Ashby) Ltd has undergone a management buy-out saving 25 jobs, after entering into administration in August this year.
Calder Colours, a £3.1m turnover business, manufactures art and craft materials for education and retail customers. The business went into administration when delayed commercial customer orders resulted in cash flow difficulties.
Administrators Beverley Marsh and Geoff Rowley, client partners at Vantis Business Recovery Services, a division of Vantis, the UK accounting, tax and business advisory group, continued to run the company while searching for a buyer as a going concern. Marsh commented: “Calder Colours is a strong business with a good track record. Unfortunately it fell victim to the credit crunch as regular customers, reluctant to spend, delayed orders and payment. This caused a shortfall in working capital and forced the business into insolvency.
“We worked with the management team to restructure the business and continue to trade. We contacted almost 30 potential trade buyers, but the downturn in the economy is making would-be purchasers more reticent.”
Senior members of the management team led by Steve Barlow proposed a buy-out last week, to purchase the business and assets of Calder Colours. Vantis Business Recovery Services was able to secure funding from Cattles Invoice Finance, and the sale of the business was advised on by James Keates, partner at Shoosmiths.
Steve Barlow, managing director at Calder Colours, said: “Beverley and her team at Vantis Business Recovery Services worked hard with us to find a solution that would enable us to safeguard jobs and continue to trade. Calder Colours is a robust business, but we needed to find a funding solution that addressed our cash flow pressures.
“We are confident we now have the right package in place that will allow us to sustain and grow our business. A key market for us is the education sector, and as this is largely recession proof. We are in good shape moving forward.”
Marsh concluded: “It is very heartening to have found a solution for Calder Colours, particularly in the current climate. It proves that administration doesn’t always mean the end of the road, and that for the right business and management team, there are still funders willing to lend.”
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