In a deal completed this morning (25 September), the eight-strong leadership team bought the assets from joint administrators Geoff Rowley, Iain Fraser, Tom MacLennan and Phil Reynolds of FRP Advisory.
Headed up by current managing director Jonathan Mitchell, the rest of the MBO team consists of Angus MacSween, Stephen Smith, Jordi Sauras, Thierry Soulabaille, Béatrice Baluteaud, Charles de James and Christophe Jordan.
The purchase has been made by subsidiaries of a new venture, Creative Paper Holdings, which was formed by the team for the purposes of the deal.
The company was incorporated on 21 June, according to Companies House, with Mitchell and Smith appointed as directors on the same day. MacSween was also subsequently appointed as a director on 10 September.
The jobs saved by location are 450 at the Stoneywood mill in Aberdeen, 82 at the Chartham mill in Kent and 27 at a sales office in Basingstoke. All staff are transferring with immediate effect.
When the companies went into administration on 15 January, 489 staff worked at Stoneywood, with 90 based at Chartham.
A spokesperson for the administrators confirmed to Printweek that no redundancies have been made, but “there has been some natural wastage of employees during the course of the administration”.
Arjowiggins Fine Papers operated the Stoneywood plant, which has manufactured fine and custom papers since 1770, and the Basingstoke base while Arjowiggins Chartham operated the Chartham mill, which has manufactured high-quality translucent papers since 1938.
Funding for the deal came from Shawbrook Bank and SQN Asset Finance Income Fund as well as a number of strategic customers. Significant financial backing has also been received from national economic development agency Scottish Enterprise.
Mitchell said: “We are absolutely delighted to have secured the future of a strong and sustainable business which has such a long heritage in the UK.
“Arjowiggins Creative Papers has world-renowned market-leading brands and products and a passionate and talented team. We are looking forward to taking steps to further strengthen the business and continue to provide first-class products and customer service to our clients.”
He added: “The last nine months has been an unsettling time for the company, and we are extremely grateful to the administrators, FRP Advisory, for having allowed the business to continue to trade while we found a workable solution.
“The support we have had from our staff, customers, suppliers and the Scottish government has been incredible and without them this deal would not have been possible. There has been a real combined will to keep this historic business alive.”
FRP Advisory’s Rowley added: “We are delighted to have concluded a deal with the management buyout team that has saved the jobs of 559 highly skilled staff across the UK. It has been an extremely challenging time for everyone.
“During the last eight months the backing we have received from the staff, unions, suppliers, customers and local communities has been crucial to keep the business trading in order to maximise the chances of a successful management buyout bid and we would like to thank them for their support to save the businesses.”
In Aberdeen, where 75% of employees are based, a common purpose group was established by Scottish National Party minister for business, fair work and skills Jamie Hepburn, with a focus on securing a long-term future for the Stoneywood mill.
This was led by Scottish Enterprise and included representatives of the company’s management, Aberdeen City and Aberdeenshire councils, Opportunity North East, Aberdeen and Grampian Chamber of Commerce and union Unite.
Hepburn said: “This is great news for the employees and their families, and indeed welcomed across Aberdeen, the Northeast and further afield.
“The Scottish government, through Scottish Enterprise, has been working intensively with the administrator, management team, Unite and local partners throughout this entire process to secure this positive outcome.”
Scottish Enterprise chief executive Steve Dunlop added: “This result is the culmination of nine months of hard work from everyone involved and I’d like to congratulate all parties on reaching this milestone. This is an excellent example of teamwork and determination paying off.
“We will now work with the new owners as they continue their proud legacy in Aberdeen and develop their plans for the future.”
Unite said it was glad the MBO had been successful “after an extensive period of uncertainty for the staff”.
“We look forward to working with the new management structure going forward and continuing our recognition agreement with the company on behalf of our members,” said Regional industrial officer Shauna Wright.
“It’s also appropriate to thank all of the Unite shop stewards who have continued to seek the best possible outcomes for their members during this difficult time.”
The administrators had initially accepted a bid for the Stoneywood mill from one party on 26 March 2019. But in their six-month progress report on the situation, they said it became clear shortly after that this party was unable to secure the necessary funding to complete a purchase.
The group’s previous management had subsequently advised the administrators of their interest in purchasing both the Stoneywood and Chartham mills in May.
The successful completion of their MBO in the UK is the first in a two stage process – the management team are also in advanced discussions with French administrators on the acquisition of the company’s non-UK operations, which include Spanish mill Guarro Casas and the Quzhou mill in China.
