Managed service provider IDE Group was in danger of becoming insolvent under its previous management, according to executive director Ian Smith.
Smith took charge of the business, formally known as Coretx, in May, after previous CEO Andy Ross stepped down in March. Smith's arrival also saw the departure of COO Julian Phipps, leaving him as the sole exec.
He said that the new management is now in the process of reversing "the little integration" that has taken place since IDE made a handful of acquisitions.
The business then went on to acquire 365ITMS in 2017.
Smith offered the London Stock Exchange a damning assessment of the previous management, claiming the firm would not have survived much longer.
He added that IDE will now be split up again into three components.
"I strongly believe that the strategy pursued by previous management, if allowed to continue, would have seen the company become insolvent," Smith claimed.
"For example, many onerous contracts were signed that created little or no value to the company, including a single outsourced service contract that is costing the company more than £1m a year and which has generated net cost savings of only £50,000.
"This contract, alongside others, was signed without due process or compliance with the company's authority limits. The company has sought legal advice regarding this contract and we are currently considering our options in this respect."
Smith also further criticised the degree of integration carried out by the previous management.
He said: "Furthermore, generally when completing a buy-and-build [strategy], which was IDE's stated strategy, synergies are part and parcel of the business case.
"One would reasonably expect that as a result of putting together the three companies that now comprise the group, there would be a smaller number of staff than would have existed across the three companies at the time of acquisition.
"This is clearly not the case: at the time of the acquisitions there were a combined 440 members of staff across all three companies and as at 31 December 2017 the group had 550 members of staff, an increase of over 100 heads for which there was little or no incremental revenue gain. This number has since been reduced to under 400."
IDE has raised £7.55m since May to aid its restructuring efforts. The firm said it is considering offloading certain units of the business, but said that current negotiations may amount to nothing.
IDE's revenue for the six months ending 30 June 2018 was down £1m to £29m, while adjusted EBITDA was down 89.6 per cent to £250,000.
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