At the same time chief executive Ken Minton will leave the company with immediate effect. Klippan chairman Jan Bernander and fellow director Alan Walker will join the Inveresk board. The remaining 150 employees at Caldwells will join Klippan as part of the deal.

The deal comes on the back of the on-going merger negotiations between the two companies, announced in September (PrintWeek, 27 September).

Klippan president Bengt stensson said the long-term goal of Klippan remained to merge the two companies, but this would first involve a complete re-financing and re-structuring of Inveresk.

The deal has been described by Inveresk directors as giving the company a much needed cash injection, in a bid to ease its problems following a breach of banking covenants set out as part of its loan agreements with the Royal Bank of Scotland (PrintWeek, 23 August).

Klippan will pay an initial 1m, followed by a further 1m in five business days, with any balance over the 2m payable following a stock evaluation.

Inveresk said it had announced the 51 job cuts to ease costs, prior to agreeing to sell the Caldwells Mill to Klippan.

Although the deal will provide much-needed cash to shore up the business, the Inveresk directors have said in a statement that the working capital available to the company, even after the transaction, is not enough for the next 12 months.

Talks will continue between the two parties with a view to a merger, but Inveresk has not ruled out a sale of either its remaining St Cuthberts or Carrongrove mills, to raise additional working capital.

Story by Andy Scott

Picture: Inveresk - 2m-plus deal