Better Capital’s Reader’s Digest to undergo restructuring

The restructuring, which will include the immediate redundancy of around 95 employees, will allow the business to focus on its profitable magazine activity, while moving away from the loss-making direct marketing sector. Other liabilities of the business will be restructured as part of the process, assisted by accountancy firm BDO.

The GP stated that while early cost-cutting has improved profitability, a faster than expected decline in the direct marketing sales of CDs, DVDs and books has made trading extremely difficult and no long-term viability for that line of business exists.

In February 2010, the UK business went into administration due to significant pension liabilities. Later that year, Better Capital acquired the trade and assets of Reader's Digest UK out of administration in a deal valued at £13m. The firm's management took a 35% stake in the business as part of the transaction. The GP invested through its £142.2m AIM-listed BECAP fund, with investment bank Seymour Pierce leading the sales process. Following the deal, the company was debt-free with its pension liabilities remaining in the Pension Protection Fund.

The following year, Better Capital injected a further £3m into the company.

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• Topics
• UK / Ireland
• United Kingdom
• Better Capital LLP