Leeds-based GNE went into administration with Begbies Traynor on Monday evening (12th February), and Encore acquired it yesterday morning (13th February) in a pre-pack deal.
GNE manufactures and supplies around 1.5bn envelopes a year, and its services include envelope manufacturing and overprinting from reels and sheets. It also has an ecommerce solution for key clients, G-Net.
Turnover at the company was down 7.8% to £16.4m in its most recent financial year, to 30 April 2017, while operating profit fell by almost 30%, from £784.9k to £567.4k.
PrintWeek understands that the business had been trying to find a buyer to rescue it prior to the administration.
Russell Croisdale, managing director at £28.3m turnover Encore, which has plants at Peterlee in Durham and Washington, Tyne & Wear, said: "We became aware that GNE had hit financial difficulties, like many other businesses in our sector have done. Fortunately we are well funded and we were able to step in and secure the business."
Encore's main business is envelopes, but it also has packaging and commercial print arms.
All 129 GNE employees will TUPE over, with the exception of GNE's directors, Croisdale added. GNE will continue to operate from its Leeds site.
"The plan now is to stabilise the business while we work out what we've got. GNE trades in the same marketplace as we do, so we know the market and the clients and they certainly have some good clients and good people. The staff have had a tough few weeks by the sound of things, so hopefully this will give some reassurance to employees," he said.
"The main thing is to keep continuity for customers, which we are doing."
Croisdale said the GNE name would continue for the time being.
Encore acquired Tompla's UK business four years ago and lays claim to being the largest independent manufacturer of printed envelopes in the UK, producing some 50m bespoke envelopes every week. The combined size of the Encore business with GNE could see Encore leapfrog the Bong UK businesses and Mail Solutions to become the biggest envelope specialist in the country, according to the latest PrintWeek league table feature on envelope specialists.
Nick Reed, joint administrator at Begbies Traynor, commented: “While GNE has faced tough trading conditions in recent years, it will benefit from being part of a large, established company like Encore. In the circumstances, the sale is the best possible outcome for creditors, staff and customers.”
GNE was part of Adare until it was sold to an MBO team led by Warren Shermer in 2005. There was a secondary MBO in 2011.
