The sale of the separate businesses of the failed print group GEON has continued, with receivers and administrators McGrathNichol announcing an in principal agreement for a management buyout of the Perth business Advance Press.
The Perth business was widely regarded as the best performing of the businesses, and the new entity will be headed by long-time manager Ian Smith.
“Pleasingly most of the 63 employees will retain their jobs at the Bassendean offset and digital printing facility,” said James Thackray, partner at McGrathNicol.
Not all former GEON businesses have had such a happy ending. The group’s Queensland businesses were closed within days of the group entering receivership with all jobs lost. Meanwhile, large parts of the NSW and Victorian businesses were bought by rival sheet-feed printer BlueStar.
In the BlueStar acquisition, approximately 150 staff were taken across from Geon with the remainder (possibly as many as a further 250) losing their jobs.
Blue Star acquired the businesses run out of the Banksmeadow print site and the Parramatta mailing division as well as the Mt Waverly facility in Melbourne. The value of the deal has not been disclosed. The three sites are believed to generate around $120 million in revenue annually and employ approximately 400 people.
Blue Star Group managing director Geoff Selig told B&T that the “receiver wants us out”, of the Banks Meadow facility, which employed the bulk of Geon staff in Sydney. Selig would not confirm when the Geon facilities would close, but B&T understands it’s imminent.
Blue Star also acquired approximately $10 million in fixed assets (printers) in the deal, which has been widely rumoured as the deal of the century owing to the speed with which it occurred to avoid the businesses closing.
The haste was brought about by an extraordinary few weeks which saw Geon go into administration after its new owners private equity players KKR and Allegro refused to give it a $3 million lifeline. Once the group was placed into administrator, the private equity owners immediately placed a bid for the business in an attempt to re-birth it debt free. Debts were later revealed to be in the vicinity of $110 million by administrators PPB Advisory.
Other industry players were angered by this seemingly murky manoeuvre with Stephen Anstice, CEO of the country’s second biggest print business IPMG, saying: “IPMG is considering instituting a policy where we will not support any suppliers who decide to do business with Geon should it re-emerge under the ownership of KKR and Allegro leaving creditors unpaid.”
Geon’s three major paper suppliers took the matter a step further and immediately ceased all paper supplies to Geon until they had been paid in full all they were owed. Geon was obviously unable to meet this demand and it was forced to face the prospect that they would be closing their doors within the week.