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By | Paul Kunert 7th June 2016 17:47

Dragons' Den-run cloud biz Outsourcery close to sale – sources

Contacts tell El Reg pre-pack with Vodafone channel biz lined up

Cash-strapped AIM-listed infrastructure services biz Outsourcery – co-run by former Dragons' Den badass Piers Linney – is close to wrapping up a pre-pack administration, multiple sources have told The Register.

Trading in the firm's shares was suspended on Friday after top brass postponed publication of last year's results and confirmed it was reviewing offers for its assets that would see shareholders getting "no or little" return.

Sources claimed EY (formerly Ernst & Young), which was brought on board to oversee proceedings, is preparing a pre-pack, which means the business enters administration, wipes out its debts, and is sold as a going concern.

Outsourcery's principal secured lender Vodafone – owed around £5m to £6m – is understood to be driving the process, having again bailed out the company recently by agreeing to a finance deal. Vodafone only agreed to stump up the cash if non-exec director David Duggins joined the cloud seller's board, while Outsourcery management reviewed options for the future of the business.

Industry contacts tipped GCIcom, Vodafone's Gold certified channel partner – or trade customer if you prefer – to buy Outsourcery, but the firm did not respond to calls for comment at the time of writing.

UKFast boss Lawrence Jones, who invested £1m of his own cash in Outsourcery last year to beef up its liquidity, was also in the running to buy the business, but he confirmed that was no longer the case.

"We pulled out on the basis that we have a strong suspicion that it will go to somebody that has a relationship with Vodafone," he told us.

He said there are lots of potential deals available in the market that UKFast has mulled, and added: "There was no point wasting more time and money trying to obtain something that was unobtainable."

Outsourcery, run by Linney and co-CEO Simon Newton, listed on AIM in 2013 at 117 pence. Prior to last week's suspension, shares were valued at 4.12 pence. The company turned over £4.1m in the first half of calendar '15, and according to unaudited numbers, brought in £4m in the second half. Until 2015, Outsourcery was losing more than it was turning over.

Linney and Newton tried to hire some sales expertise in the shape of Insight UK boss Emma de Sousa, but she decided ahead of her April start date that she wouldn't join the company after all.

A spokesman for Outsourcery told us that "the process is ongoing," but declined to comment on the specifics contained in our article. Vodafone has yet to respond to calls for comment. ®

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