The Fife-based retailer has been bought for an undisclosed sum by a team led by former managing director Douglas Mutter 10 weeks after administrators from accountancy firm Tenon were appointed at the request of the directors.
The buyout will result in the Acorn Pet Centres business being acquired by a new entity that will operate 24 stores under the Acorn brand across Scotland. These employ 153 staff in total.
Another 11 stores were closed by the administrators following their appointment, with the loss of 73 jobs.
Douglas Mutter told The Herald that he had bought Acorn for an undisclosed amount with equity backing from three successful businessmen, who wished to remain anonymous.
He declined to give any indication of how much funding they had provided. He said the deal involved successful parts of the Acorn Pets Centre business, which had been trading for 25 years before it was put into administration.
“The core part of the business is extremely profitable. That’s what was left over after the administration,” he said. “There were a number of strong bids for the business.”
In a press release, Tenon said there had been “40 enquiries and a number of strong bids”.
However, a spokeswoman for the company said there is no likelihood of a distribution to the unsecured creditors of Acorn Pet Centres.
In an official statement of proposals filed last month, the administrators said Acorn Pet centres owed unsecured creditors £955,000. There were employee claims totalling an estimated £140,000 and an estimated £1m landlord claims.
The statement shows Acorn owed a creditor with a floating charge £4.4m.
Acorn’s accounts for the year to 31 January 2008 show Bank of Scotland had a floating charge over all the assets of the company.
Asked why directors had felt it necessary to put Acorn into administration, Douglas Mutter said: “There was a number of reasons, a few bound by confidentiality.”
When he was asked the same question again, he said the decision was “due to significant losses that the company had made”.
“It was not able to service the funding levels of the company.
“Working very closely with our professional advisers we decided it had to be put into administration. We had no option.”
And asked why Acorn could not have been sold as a going concern, he said: “It was out of our hands.”
Asked if this comment meant that the process had been dictated by Acorn’s bank he said: “Effectively.”
However, a Bank of Scotland spokesman, said: “We categorically deny any suggestion that Bank of Scotland was involved in the decision to appoint administrators to Acorn Pet Centres.
“The management of the business took this decision after reaching a point where the business regrettably could no longer continue to trade.” Douglas Mutter said Bank of Scotland would be Acorn’s “banking partners going forward.”
He said none of the shareholders of Acorn Pet Centres would receive any money from the deal.
At the administration date Douglas Mutter had 2800 shares, representing 35% of the total. Rory Mutter had 35%. Nicola Mutter had 18%. Other shareholders had 12%.
The accounts for the year to January 2008 state that in March 2008 Acorn Pet Centres bought 1000 ordinary shares from Jacqueline Mutter and 1000 shares from Alan Mutter for £1m in total. The company made £337,000 pre-tax profit in the year.
In their statement, the company’s administrators noted Acorn had expanded in recent years. The company made unaudited losses of £1.14m in the year to January and £557,000 in the six months to July.
The Bank of Scotland spokesman said: “We pride ourselves on the support we offer our customers in managing their businesses in these tough markets. “The last thing we want to see is an insolvency, particularly if there are other viable options available.”
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