Palatine-backed Forrest enters into administration

Kenny Wastell
11 December 2018

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Palatine Private Equity-backed construction company Forrest has entered into administration.

The development comes 21 months after the business underwent a refinancing that included "additional shareholder support", according to a statement issued by administrator FRP Advisory. The fresh backing was intended to support the company following the loss of refurbishment contracts.

According to the statement, Forrest suffered subsequent delays and operational issues at three construction sites that had been started prior to the refinancing. This was compounded by "incorrect pre-construction estimates across new construction projects" and ultimately resulted in unsustainable cash flows.

FRP has already announced the sale of some contracts held by Forrest to Engie Regeneration, which it said would preserve 64 jobs. However, the administrator added that it has been unable to find an acquirer for the divisions focused on high-density development and housing, resulting in the decision to wind down the divisions.

The procedure also comes 15 months after the business recruited Carillion regional manager Mark Nicholson as CEO.

A spokesperson for Palatine declined to comment.

Previous funding
Forrest first received private equity backing in 2007, when LDC invested in the business.

Palatine then backed a £16m SBO of the company in a deal that saw LDC reinvest. Following the transaction, LDC and Palatine held a combined majority stake in the business.

Company
Founded in 1955, Bolton-headquartered Forrest is a construction company that works on high density developments, housing, refurbishment and energy projects. The company has a headcount of 230, down from 500 at the time of Palatine's initial investment.

People
Forrest – Mark Nicholson (CEO).