Nearby Paramount was placed into administration with Begbies & Traynor on 30 November after hitting cashflow difficulties and falling under pressure from a key supplier.
The firm had enjoyed a boom during the pandemic, rising to £2.25m turnover in 2021, but over the past year several major customers had reducd their orders, according to the administrators’ report.
Compounding this fall in revenue, rising costs cut into Paramount’s profits and liquidity, worsened by suppliers reducing credit limits and the firm’s largest supplier ultimately putting a stop on their account.
Despite these difficulties, Paramount had found a number of new customers in 2023, with more potentially incoming – but the cashflow issues prompted first an attempt at a solvent share sale, before the firm’s director Phil Wright contacted Begbies & Traynor.
Following the firm’s marketing, Mark Malone and Gareth Prince, partners at Begbies & Traynor, were appointed on 30 November, with the pre-pack sale to Customark taking place the same day.
Malone said: “Having reviewed the company’s financial position, it was concluded that selling the business out of administration was a realistic objective and would provide the best outcome for employees, suppliers and customers by securing continuity of supply.
“The company has a good reputation in its sector and the level of interest received during the sale process was very positive.”
Wright will stay with Customark in a consulting capacity for the near future.
Greg Lerigo, Customark’s managing director, told Printweek that he had been attracted to the sale both by Paramount’s proximity – at around 30 minutes’ drive from Customark in Cannock– and its equipment.
He said: “Paramount seemed to be, from what I could see, very similar to our [business].
“Obviously, I went and had a look at the site, and it was very well equipped. They spent a lot of money in the last two years on new plant and equipment – in fact some of it is the same [as ours] – so it was clear they were doing similar things to us.”
Paramount’s investments over the past seven years included a Dantex reel-to-reel digital press, an eight-colour MPS flexo press, a six-colour Mark Andy flexo press, three finishing machines and a digital finisher. The factory was also redecorated during the pandemic, with a mezzanine floor and climate control added.
All 18 employees are set to retain their jobs.
Lerigo added that the acquisition was part of a wider growth strategy for the firm.
He said: “I’m looking to grow Customark from where we are. We have about £5.8m [turnover] and with Paramount it will take us to £7.3m. A further acquisition planned soon will increase our revenue to £9m with a projected profit [margin] of 17%.”
Lerigo did not reveal any details of the planned acquisition.
