© The Financial Times Ltd 2013 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
February 2, 2013 2:23 am
Daisy Group, the Aim-traded IT group, emerged as a potential bidder for 2e2, the Newbury-based IT group that fell into administration this week.
Talks between the two companies were described as “fairly advanced” by someone with knowledge of the negotiations. Administrators FTI Consulting said that a sale was very near and could be completed as early as next week.
Simon Granger, joint administrator at FTI Consulting, said that there was a “significant number of expressions of interest” in acquiring 2e2’s UK and international businesses. “We are confident that a sale can be concluded in the very near term,” he said.
One person with knowledge of the negotiations said: “[Negotiations are] quite fraught because the financial information is of very poor quality. All the senior team [at 2e2] has gone. It’s very difficult to get any sensible answers from them.”
2e2 was founded in 2002 by Terry Burt, its former chief executive. Cable & Wireless made an informal bid of £360m for the group as recently as 2011, which was rejected by management. That year the group, which specialised in cloud computing, reported full-year revenues of £403m. It struggled through 2012 as the wider IT industry creaked under the pressure of mounting capital expenditure costs and dwindling margins. Contractors were not being paid on time while bailiffs visited 2e2 offices, according to former staff members.
Duke Street Capital, the private equity firm that owned a 75 per cent stake in the group, wrote down the value of nearly all its stake last summer. The value of the remaining chunk of equity was written down at the end of 2012. The IT group sacked 319 of its near-1,500 staff on Tuesday without notice, while 26 more were made redundant in a conference call on Friday morning.
Those who have been laid off have not been paid for January, say two former staff members.
Other potential bidders include Computacenter, which has similar operations to 2e2, according to George O’Connor, analyst at Panmure Gordon. “Computacenter is well positioned to cherry pick some of 2e2’s trophy managed service and professional service contracts,” he said.
Computacenter declined to comment.
Elsewhere in the sector, Daisy completed its acquisition of The Net Crowd, the IT data specialist, for an undisclosed sum.
Trevor Rolls, managing director of The Net Crowd, who will stay on his position, sold his previous business to 2e2 for $45m in 2004.
Copyright The Financial Times Limited 2013. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.