PRINTING firm Stewarts of Edinburgh has put the rival it bought less than a month ago into liquidation after uncovering irregularities in the business.
Edinburgh-based Summerhall has been closed down – with the loss of 135 jobs – as Stewarts abandoned plans to create a bigger business from the two firms.
Last night, managers at Stewarts admitted they had not had long to carry out the due diligen
ce process before they bought Summerhall on 15 December.
Stewarts snapped up Summerhall for an undisclosed sum after it fell into the hands of administrators Zolfo Cooper.
But after examining the company's books, Stewarts found there were issues that it felt made it "impossible" to continue trading at the firm.
Stewarts managing director Terry O'Hare told The Scotsman: "We did not have a great deal of time to carry out due diligence on the business before the acquisition and we relied on information that was presented to us."
He added: "We have built a very strong reputation since 1879 based on honesty and integrity and consistent trading with our clients."
It is understood that the problems relate to invoicing, although O'Hare refused to comment on any of the details yesterday.
O'Hare added: "The decision to put Summerhall into liquidation was a direct result of unforeseen circumstances relating to the viability of the company.
"We regret very much that people have lost their jobs as a result of these previous problems existing at Summerhall."
All of Summerhall's 135-strong workforce were told they had lost their jobs two days before Christmas when the firm was taken into the hands of liquidator French Duncan. However, O'Hare said that Stewarts was likely to take on extra customers from Summerhall – whose client list previously boasted names such as Standard Life and as Gleneagles Hotel – and may expand its workforce.
Eileen Blackburn, liquidator at French Duncan, said: "It was not entirely what they (Stewarts] expected.
"They hadn't had much opportunity to carry out due diligence on the firm before the acquisition and they uncovered some matters with which they were dissatisfied and felt that they could not continue to operate the business."
Stewarts' acquisition of Summerhall was expected to treble its £6.5 million turnover to an estimated £18.5m and add two new sites in Edinburgh.
Fraser Gray, partner at Summerhall's former administrator, Zolfo Cooper, said they were "disappointed" that the directors of the new business had ceased trading and placed the new company into liquidation.
Gray added: "However, we are unaware of the reasoning or the circumstances that led the directors of the new business to make this decision."
Former Summerhall director George Pryde yesterday failed to return calls from The Scotsman.
