Director Simon Smogur has called a meeting of creditors for 8 February 2024.
He told Printweek: “The Group acquired Severn with good intentions. However, shortly after the acquisition it became very clear that a key contract representing circa £1.5m of revenue had been lost.
“The revenue associated to this account started to reduce rapidly shortly after our acquisition. We were not made aware of expecting this.
“This unfortunately meant the business could no longer service its debt and the only outcome was to place the business into liquidation.
“I want to express that the other trading [businesses] in the group will continue to trade successfully as they have done, and I want to apologise to any [Severn Print] creditor or employee impacted.
“It’s now very clear that with or without our input the business would have gone down this route with such a significant contract loss.”
Smogur declined to comment on whether Handel was considering legal action.
Severn was bought by the Handel Group, umbrella company to Smogur’s litho ESP and digital ESP Smile print firms, on 11 October, following discussions in the summer.
Handel took on Severn’s digital business only, representing around 80 of 90 staff employed, and sold Severn’s litho kit – a pair of Speedmasters – using the proceeds to pay down “a big chunk” of Severn’s existing debt.
Severn itself had been bought by Mark Allington, formerly of CPI Books, in a 2020 MBO of previous directors Ian Smith and Martin Clegg. Smith and Clegg themselves bought out Severn Print's employee trust in 2018.
Allington joined Handel as CTO as part of the purchase.
An industry source said: "Over the last four years Severn has changed hands so many times, it seemed like the company was a hot potato with people passing around the ownership."
In December, Smogur outlined his plans to align Severn Print and ESP Smile as a digital bloc worth £15m.
He said: “The market is consolidating at quite a rapid rate, and if you look at history, and what has happened in continental Europe, it needs to consolidate.
“If you looked at the average size of a printer 10 years ago, it would have been three or four million [pounds turnover], with a couple of big ones – if you took that average spread now, I would suspect it’s a lot higher.
“So with that process in mind, I’ve approached a lot of companies over the past year.”
Michael Durkan of Durkan Cahill looks likely to oversee the insolvency process.
