Wed, 13 Dec 2023 | ADMINISTRATION
WHP, a Gateshead-based engineering business that was backed by private equity firm Endless, has fallen into administration after facing significant financial challenges over recent months. The business had been impacted by headwinds including cost inflation, labour shortages, squeezed margins and insolvencies at other contractors and suppliers.
WHP supplies design and build services for cleanrooms, clean manufacturing and process systems, serving the life sciences, healthcare and personal care cosmetics markets. The business was backed by Endless during a Management Buyout (MBO) in 2016.
After several months of financial challenges, the firm’s directors sought to undertake a strategic review of the business’ options. These included a potential sale of shares or the businesses and assets, as well as seeking external funding.
However, due to the limited timeframe, it became clear that a solvent solution would not be possible. Chris Petts and James Hitchens of Grant Thornton were subsequently appointed as joint administrators of WHP Engineering Ltd and WHP Facilities Ltd on December 4.
After entering administration, conversations with interested parties are continuing and the joint administrators are assessing the business’ options and engaging with customers and creditors while preparing for an asset sale. The majority of WHP’s 61 workforce have been made redundant.
Joint administrator Chris Petts said: “Despite its scale and the success achieved over recent years, the severe impact of Covid and recent pressures, including factors such as a contract which was loss-making and the failure of a key sub-contractor, meant that WHP was not in a financial position to continue trading and so we have had to make the difficult decision to cease operations.”
Endless partner Paul Denvers added: "We are naturally disappointed not to have led an ultimately successful turnaround of WHP, in which we backed the MBO of a heavily loss-making business in 2016.”
"Over seven years, we secured jobs, addressed fixed costs, restored WHP to profitability and invested significantly to position the business for long term growth. Nonetheless, recent and present challenges as a result of well-documented pressures in the wider construction sector have made it impossible to continue as a going concern."
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