Mon, 03 Apr 2023 | ADMINISTRATION
Integrated construction firm Spatial Initiative Limited has completed the acquisition of an off-site modular construction business out of administration. Eco Modular Buildings Ltd and its parent company Rawson Brook Group Holdings Ltd fell into administration on March 24 2023.
Jane Steer, Tim Higgins and Peter Dickens of PwC were appointed as joint administrators to the companies and completed a sale of the business and its assets to the Manchester-based Spatial Initiative.
The administrators said that the sale was the best option available to the companies’ creditors, given the severely limited timescales after the businesses fell into administration. The majority of the 65 employees transferred to Spatial Initiative as part of the deal.
Rawson Brook Group Holdings was incorporated in 2016, with its 100 per cent owned subsidiary Eco Modular Buildings incorporated in 2010. Both companies are based in Hull and operated as an off-site modular construction group, primarily working in the education sector.
Despite significant revenue growth following its founding, the group began to experience challenges from 2020, meaning it required additional funding. It continued to experience delays on projects throughout 2022, resulting in operating losses that eroded its available working capital.
The group engaged PwC in August 2022 to review its cash flow and carry out an independent review of the businesses. Following the review, management concluded that a sale process was the best available option, with PwC retained to manage the process, ultimately closing a sale of the business and its assets to Spatial Initiative.
Joint administrator Jane Steer said: "Particularly during the current testing economic climate, the completion of this transaction provides much needed certainty to over 50 members of staff after a period of understandable concern following the group's challenges over the past months.”
In the year to December 31 2021, Rawson Brook Group Holdings reported turnover of £3.6 million and a £439,134 pre-tax profit. At the time, the business’ fixed assets were valued at £2.5 million and total assets less liabilities at £1.9 million. Net assets amounted to £944,665.
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