Paragon acquires Brand Deployment business, as well as certain assets of Customer Experience business
Mike Pink and Steve Absolom from Interpath Advisory were appointed Joint Administrators of Communisis Limited on 28 December 2023. At the same time, James Clark and Steve Absolom from Interpath Advisory were appointed Joint Administrators of Communisis UK Limited, Communisis Digital Limited and Communisis Data Intelligence Limited (together “the Companies”).
Headquartered in Leeds, the Communisis group specialises in the provision of transactional communications, procurement services and marketing execution to customers across the FMCG, retail and regulated markets. The Company employs just over 1,000 people in the UK and circa 200 overseas.
The group’s Brand Deployment (‘BD’) business provides marketing and brand engagement services to some of the world’s biggest brands. Its Customer Experience (‘CE’) business provides secure print and mailing services for the UK's largest financial and public institutions, communicating to every household in the UK, and delivering c700 million information packs and 1.3 billion pages per annum.
The group, and the CE business in particular, had been experiencing challenging trading conditions for some time. The printing sector as a whole is witnessing inexorably declining volumes in the wake of the emergence of digital technologies, while the costs of production – including rising energy prices and the cost of paper – has also hit some companies across the sector hard.
A digital transformation programme which sought to improve Communisis’ legacy technology platforms proved to be more complex and costly than originally forecast. In addition, in October 2023, the Companies’ U.S. parent, OSG Group, announced it was to enter a Chapter 11 restructuring process which, once complete, would see Communisis Limited exit the OSG Group. Communisis’ financial pressures were then further exacerbated by the loss of a number of customer contracts which resulted in excess capacity at certain of its sites.
Over recent months, the group has worked closely with its advisors, customers and stakeholders to explore a number of options which would enable the CE business to move forward on a more sustainable footing, including exploring options around a whole or partial sale. When it became clear that a solvent solution could not be found for CE, the directors took the difficult decision to seek the appointment of administrators.
Immediately following their appointment, the joint administrators of the Companies completed a sale of the shares of the BD business and certain assets of the CE business to Paragon Customer Communications (London) Limited (‘Paragon’). The transaction includes the agencies Twelve and Editions and the point of purchase specialist, Vox Group. Paragon’s acquisition of certain assets of the CE business is primarily for the delivery of services for Lloyds Banking Group. This will see Paragon managing over 100 million communications to and from the bank’s customers annually.
The transaction safeguards the jobs of 581 people, including those working in the BD business across the globe.
In addition, 25 employees have transferred to new suppliers over recent months as customers have exited the Communisis platform.
Regrettably, however, with certain operations ceasing at the group’s facilities in Liverpool, Leeds and Cramlington, 638 employees have been made redundant.
Stephen Absolom, managing director at Interpath Advisory and joint administrator, said: “First and foremost, we recognise that this will come as a devastating blow to those Communisis workers who have been impacted by redundancy.
“Our immediate priority will be to work with all affected employees to ensure that the full range of support is available to them.
“We will be making contact with Communisis’ key competitors, customers and other companies who work in this space to enquire around possible employment opportunities for staff. We will collate all relevant information, including contact details such as telephone numbers and hotlines, and we will also be speaking as a matter of urgency with the Job Centre Rapid Response Unit.
“We are also liaising with the Insolvency Service in relation to the timing of redundancy payments via the Redundancy Payments Service.”
James Clark, managing director at Interpath Advisory and joint administrator added, “The transaction with Paragon enables the historically profitable Brand Deployment business to move forward under new ownership, as well as ensuring the continuity of service to Lloyds Banking Group.
“The complexity of the Communisis business means that this transaction is the culmination of many months of hard work from a wide range of stakeholders. We’d like to thank each of them, in particular the Communisis workforce who have maintained service levels to customers under extremely challenging circumstances. In addition, the support and efforts of the Communisis’ customers, suppliers, as well as the Pensions Trustees and regulatory bodies have ultimately enabled this agreement with Paragon to be reached today.”
