Entatech has gone out of business after last-gasp efforts to sell the distributor failed, CRN understands.
According to multiple sources, at 4pm yesterday the Telford-based outfit was put into administration and most staff were relieved of their duties.
Hamstrung by deepening credit woes, Entatech had been widely marketed to potential trade buyers in recent weeks.
A deal with Beta Distribution, thought to be a ‘pre-pack', looked to be in the offing on Friday, but Beta confirmed yesterday that it had withdrawn from talks, due to information obtained during the due diligence process.
According to onlookers, Beta got the jitters after discovering Microsoft partner Entatech's stock was worth less than it initially thought, because lots of it had retention of title on it.
CRN understands that a skeleton team has been kept on to help preserve the Telford-based distributor's enterprise value and maximise value for creditors.
Entatech managing director Dave Stevinson said he was currently unable to comment on the distributor's current status, but expressed regret at recent events.
"I'm so sorry; I tried so hard to make this work," he told CRN.
Dogged by legacy VAT issues, Entatech was known to have been in a distressed situation two years ago. Stevinson quickly worked to bring in fresh management and vowed to instil a culture of integrity and openness at the distributor, and in February 2016 Entatech appeared to have begun a new chapter when it reached a settlement with HMRC.
However, the loss of key vendor contracts and a gradual squeeze in its trade credit since then plunged Entatech back into financial strife, causing banking backers RBS to withdraw support in April.
The distributor was apparently marketing itself for £1, but attempts to sell it as a solvent entity came to nothing.
Although the distribution landscape has seen an intense bout of consolidation in recent months, with Avnet and Hammer being bought, and Westcon up for sale, this would be the first significant UK distributor insolvency since Steljes went under.
Components, software and systems specialist Entatech currently has about 75 staff, a number that has been cut repeatedly in recent months as the distributor trimmed its cost base.
It is understood that there will be extensive shareholder funds for trade creditors.
CRN does not yet know the circumstances of the administration, or the identity of the insolvency practitioner involved, but will endeavour to bring you more details as they become clear to us.
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