PHS, the company that installs toilet rolls, soap and water coolers in a quarter of a million offices around the UK, is about to begin the process of selling itself in a bid to avoid falling into the hands of US vulture funds.
The embattled company has hired corporate advisory firm NM Rothschild to find a buyer, and it will send out information packs in the next few days to potential suitors, according to City sources.
One source said the sale process run by NM Rothschild is also designed to help lenders work out how much PHS is worth ahead of negotiations to restructure the company’s debt.
PHS: The company installs toilet rolls, soap and water coolers in a quarter of a million offices around the UK
The potential restructuring could see lenders, such as US vulture funds – which try to snap up distressed companies – take control of the business.
Caerphilly-based PHS was bought in 2005 by Charterhouse – one of the City’s most secretive private equity firms – for £740 million, including debt. It is one of Britain’s largest support services companies, providing bathroom products ad other office facilities to thousands of businesses.
But PHS has had a tough time in the past few years following a series of management changes.
Gareth Rhys Williams, the former boss of FTSE 250-listed engineer Charter International, was appointed last year to revive the company, which is now saddled with more than £900 million of debt.
However, in the past 18 months Charterhouse has been forced to plough money into PHS, but effectively is no longer in control since it became clear this year that the business was in financial difficulties.
An army of financial and legal advisers are now working with lenders to PHS and negotiations over reorganising its debts are set to start in the next couple of months.
US investment bank Houlihan Lokey has been appointed to advise some funds that own the senior debt, while some other debt holders have appointed Moelis, another US investment bank, to argue their case at the negotiating table.
Some investment bankers, however, are sceptical that NM Rothschild will be able to find a buyer for the company.
PHS and Charterhouse both declined to comment.