The proposed deal to buy ISG collapsed after the prospective buyer reduced the value of its bid, according to the man behind the move.
The UK’s fifth-biggest contractor announced it was filing for administration last week, after a deal to sell the firm to acquisition vehicle Antipodean Holdings foundered.
Speaking exclusively to Construction News, Antipodean director Andre Redinger rejected claims that his firm had been unable to prove it had sufficient funds to complete the deal.
In August this year, six months after he first approached ISG owner, Texas-based Cathexis, Redinger realised that more working capital would be required to stabilise the contractor than originally anticipated, Redinger said.
He said: “I sat there and started looking at the numbers and started going, ‘Wait, I’m not here on certain things’. It was very obvious that the hole was bigger than we ever thought, and it required a rethink and a new proposal.”
Redinger claimed that the lower offer was not welcomed by Cathexis and its advisers.
The South African entrepreneur said: “I think because it took so long for me to come back, it could have been perceived as a counterplay. Or maybe the perception was that I didn’t have the funds. Who knows what they were thinking?”
He said that shortly after the new offer was made, contact from ISG and Cathexis dried up.
Last week, less than a month later, CN broke the news that ISG was starting an administration process.
During the interview with CN, Redinger expressed his sympathy to staff and management at ISG.
On Friday (20 September), administrators from EY announced that 2,200 people would be made redundant from the firm immediately.
Redinger said: “I’m really sad for them. I know, whoever I spoke to when I did my due diligence, is how committed they were, how proud they were of their work, how good the work was.
“The brand was because of them. Each site had a community and a special story. My heart goes out to them.”
A statement released on Friday by administrators from EY, following their appointment as administrators for ISG, contradicted some of Redinger’s version of events.
The statement said: “…we wish to be clear to employees, suppliers, and customers that it was not possible to conclude a sale as the potential purchaser could not, despite repeated requests of them to do so, adequately demonstrate that they had the funding needed to recapitalise the business and keep it solvent”.
Read Andre Redinger’s version of why his bid to buy ISG collapsed
