Rivals in 'advanced talks' to buy MJN Colston assets
Parts of historic mechanical and electrical contractor MJN Colston should be sold by the end of the week after the company was placed in administration on 23 February, administrator Deloitte has confirmed.
Construction News understands that Spie Matthew Hall and the Dodd Group are among the companies in negotiations over acquiring contracts or part of the business.
Interested parties were given a deadline of the evening of Monday 27 February by Deloitte to express an interest.
Spie Matthew Hall chairman and chief executive Grahame Ludlow is understood to have held talks in Paris with Gauthier Louette, the chairman and chief executive of his company’s European parent, Spie, last week.
CN understands initial talks between Spie Matthew Hall and Deloitte have now taken place.
Family-owned M&E contractor Dodd Group is also understood to have expressed an interest in acquiring parts of the firm.
Neither company had responded to requests for comment as CN went to press.
A statement given to CN by Deloitte said: “We are in advanced negotiations with a number of parties with regards to the sale of specific areas of the business. It is our intention to try to conclude a deal for these parts of the business by the end of the week.”
Other rivals in the UK M&E sector have been quick to distance themselves from any potential purchase. Spokesmen from some of the largest players, including Balfour Beatty Engineering Services and Crown House Technologies, immediately dismissed talk of a deal.
A Crown House spokesman denied speculation that the company had taken over MJN Colston’s contract at the £430m Southmead Hospital in Bristol, where it is also engaged on the project. He said reports it had done so were “inaccurate”.
Responding to rumours that Emcor had expressed an interest, a spokeswoman said it was company policy “not to respond to speculation”.
Later the same day, Deloitte released a statement confirming the appointment of partners Daniel Butters and Matt Colishaw and 148 job losses at the company, which employed roughly 420 staff.
Mr Butters’ statement said Deloitte’s appointment followed a strategic review of MJN Colston’s finances and that the intention was to “trade the business in the short term with a view to selling and novating the contracts to other providers”.
“We will continue to work with the company’s suppliers and customers and will seek to find a buyer for the business and assets to minimise disruption,” he said.
Deloitte has since declined to comment on the identity of potential buyers, the reasons for the company’s situation or the size and identity of creditors and debtors.
One said: “There are a lot of rumours flying around but this has been some time coming. It was MJN’s work in the South-west that dragged them down.”
Wates Group commercial director Stuart Togwell said: “It is always disappointing to see a member of our supply chain in difficulties. However, for clarity, Wates paid all agreed accounts to MJN Colston in January 2012.”
Recruitment specialist Vital Resource is understood to be among its larger creditors.
Matt Ricketts, operations director of construction specialist credit reference agency Top Service, said the news had surprised some as no county court judgments or petitions had been registered against MJN Colston.
He said: “We have had several companies reporting issues with slow payments from MJN Colston over the past six months, with the frequency of these issues rising since the start of this year.”
MJN Colston operates from offices in Gateshead, Blackburn, Coventry, Bury St Edmunds, Croydon, Bristol, Bridgend and Exeter. Its origins can be traced back to 1890.
The firm turned over £96.1m in the year to May 2011 and it made a pre-tax profit of £2.1m last year. According to accounts filed at Companies House it incurred £247,000 of redundancy and restructuring costs in the year.
Redundancy and restructuring costs in 2010 were £1.3m and staff numbers were 15 per cent down in the year to May 2011. Directors did not take a salary last year and no dividend was paid.
The firm is owned by Staveley Engineering Services. In the year to May 2010, MJN acquired EI WHS – another SES company – for a consideration of £1.1m. They created a loan account with the vendor to do this.
Some directors got payments from SES but those are disclosed in that company’s accounts.
MJN Colston operates in the public and private sectors and notable clients include Fujitsu, the Eden Project, Sony and Arsenal’s Emirates stadium (pictured).