Administration sale saves over 400 jobs at Everest

Background

Everest Limited is one of the UK’s leading window and home improvement companies, providing window, door and conservatory products and services, operating from 18 distribution centres and two manufacturing sites. The business had been poorly performing for some time, and in an attempt to deal with the ongoing losses, it began a restructuring process. As a result, revenue had increased to £100 million, with profits forecast for the year ahead, however, the COVID-19 pandemic resulted in an immediate cessation in trading, as the manufacturing facility was closed and fitters were unable to enter consumers’ homes to complete the installation. The furlough scheme was utilised for a large proportion of the workforce, and to seek payment holidays for crown arrears.

Action

FRP’s Corporate Finance and Restructuring Advisory teams advised Everest as a result of the closure, providing an in-depth options analysis. The team were engaged to undertake an accelerated M&A process while protecting one of the main assets – the company’s order book. Following a complex series of negotiations, FRP elicited five unconnected offers, as well as an offer from the secured creditor; this offer was ultimately transacted through an administration process. A major issue was the customer deposits that had been accepted and were used in the cashflow of the business. A sale of the business was essential to ensure that these were protected; if the sale was unsuccessful the level of section 75 claims to the secured credit card provider would have been significant.

Outcome

With FRP Partners appointed as Joint Administrators, the team was able to complete the successful sale of Everest to a secured creditor and investment company in a pre-pack transaction, which included existing customer contracts and the transfer of over 400 jobs. Following a consultation process, 188 roles were unfortunately made redundant. FRP supported affected employees across the business to secure payments through the Redundancy Payments Service, which will also assist in recovering deferred pension contributions for past and transferring employees. However, the sale has enabled the retainment of a further 600 self-employed contractors who will also continue to be engaged by the company.