Duke Street-backed 2e2 collapses

Anneken Tappe
07 February 2013

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British IT services provider 2e2, backed by Duke Street, has collapsed after administrators failed to find a buyer for the business.

FTI Consulting became the company's administrator in January, led by Simon Granger. The company laid off almost 1,000 people since last week.

In December 2011, 2e2's debt burden amounted to £154.4m. Interest payments worth £20.8m led to a £7.3m pre-tax loss in the same time period. Cable & Wireless Worldwide attempted to buy the business for £360m in the same year.

Duke Street acquired the company for £130m from Gresham Private Equity in September 2006. Bank of Scotland provided mezzanine and debt financing for the deal. In March 2007, Duke Street provided £53m to fund the company's expansion, again supported by Bank of Scotland.

In October 2008, 2e2 acquired Netstore in a take-private supported by Duke Street. The deal valued the company at £58.1m. 2e2 was refinanced as part of the transaction, doubling Duke Street's capital commitment to the company.

In summer 2012, Duke Street wrote down the value of its commitments in 2e2.