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MPI rescues Butler & Tanner

07.08.07 Philip Jones

Book printer Butler & Tanner has been bought out of administration by private equity investor Media & Print Investments (MPI). The printer was put into administration on Friday afternoon after a buyout deal with MPI stumbled over the issue of B&T's pension fund.

According to a press statement put out by MPI, the private equity company wanted the Pensions Regulator to waive MPI's obligation to "make good" B&T's contingent pension fund liability. The regulator refused to grant the waiver, prompting the directors of B&T to appoint Tony Murphy of Smith & Williamson as administrator. MPI through a new wholly owned subsidiary called Butler & Tanner Printers Limited then purchased the business and assets of Butler & Tanner as a going concern thereby removing the pension liability.

However, the Pensions Regulator said it did not prevent the buyout taking place. In a statement it said: "The Pensions Regulator does not approve or prevent transactions, and did not prevent this transaction. Our interest is the impact on the pension scheme. Our voluntary clearance process simply offers assurance that we will not use our powers in relation to a transaction, it does not stop it from proceeding. If clearance is granted, it is in relation to a specific event and does not generally remove the obligation to the pension scheme. The type of comfort requested in this instance was not something we were able to provide under legislation."

MPI chief executive Mike Dolan said "this was never planned as an insolvency process, but the regulator felt his hands were tied by the legislation. We had already agreed commercial terms with our principal suppliers and none of them, including our paper suppliers, will lose anything as a result of this alternative structure". Andrew Hillman, chairman of Butler & Tanner, added: "Whilst I am naturally sorry that we were prevented by the Pensions Regulator from delivering the deal we all planned, this deal puts the business on a very firm footing."

In January B&T announced a £2.8m refinancing package sourced from the company's pension scheme and a deferral of deficit payments. The fund was understood to be £11m in the red.

B&T's existing management team led by chairman Andrew Hillman will remain in place and Dolan, Ben Crozier and two MPI appointed non-executive directors will join the board. The new B&T will retain all staff.

Dolan said: "The B&T deal provides us with a rare opportunity to acquire a highly respected and profitable business that competes in a sector of the market we are not presently exposed to. The company will fit comfortably within our portfolio as being an important third hub in our growth plan to become a major regional force in the UK print market."

Philip Jones Printing MPI Butler & Tanner

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