Better Capital acquires Calyx and prepares turnaround plan

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Better Capital acquires Calyx and prepares turnaround plan

Microscope contributor

Better Capital has been confirmed as the new owner of Calyx and will kick start its turnaround strategy by divesting parts of the networking integrator with a view to making further acquisitions.

The business was placed in the hands of administrator FRP Advisory a week ago by the venture capitalist outfit, led by private equity veteran John Moulton, which acquired Calyx's £100m debts from Anglo Irish bank for £10m to £12m.

In a statement sent to customers, Calyx chief executive Tara Brady revealed that "an agreement has been reached today with the administrator, for companies controlled by Better Capital to acquire the businesses and assets of Calyx in the UK and Ireland.

"I am delighted that such a substantial player, with experience in our sector, has chosen to invest in the business. After a period of uncertainty this will allow us to compete strongly in this exciting market," he added.

Moulton told MicroScope that it would take several weeks to "get a good handle" on the integrator which had made numerous acquisitions over the years.

"[Calyx] is not a particularly rational group of businesses, so we really do envisage there will be buying and selling activity of the group that Better Capital has acquired over the course of the next few months," Moulton revealed.

"It was bought by acquiring the debts on very limited information followed by a very fast appraisal of multiple sites, multiple opportunities and issues, and had something less than the world's finest financial state," he continued.

He said there was interest from firms wanting to "buy, sell or merge with virtually all parts of the business".

It is highly likely that the IT services operation in Ireland will be offloaded next week but the software unit will remain in the group, however Moulton would not be drawn on this point.

As part of the turnaround plan Calyx has already shed unoccupied premises in Warrington and Livingstone and Moulton revealed that it may be forced to make some redundancies, saying: "In the UK we are substantially carrying the business."

The future of the brand is another decision for Moulton to take but he added: "The main thing we have to do is make sure customers are reassured and served properly.

"Instead of dealing with a business that had a balance sheet which Greece would have been really frightened of, they will be dealing with a company that has no external debts and a determination to go forward," he said.

Calyx owes creditors around £6m and responding to concerns among some in the market that they may be left out of pocket, Moulton predicted that "the vast majority of creditors will be fine".

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