ISG set to be sold ‘in coming days’

Troubled contractor ISG is set to be sold in the ‘coming days’, the company’s chairman has confirmed.

In a memo sent out this morning to staff and suppliers, and seen by Building, Matt Roche, who is also the chief operating officer of ISG’s current US owner Cathexis, wrote: “I wanted to update you on the planned cash injection in H2 and recovery that [chief executive] Zoe Price has alluded to in recent communication with you and ISG’s external stakeholders.

“As of today, we are pleased to announce that Cathexis is very near to closing the sale of ISG and that all regulatory approvals have been received.

“The buyer has confirmed that the sale will include a significant investment, which will recapitalise the business and support the return to normal trading.

“I am unable to share details of the buyer until the deal has been signed, which is likely to be within the coming days. We are jointly aligned on this communication.

“I know you will have lots of questions but I would ask that you bear with us as we work to close the deal.

“Thank you for you patience over the past few months. I know there has been a period of uncertainty and am pleased we are now nearing a position where ISG can move forward with confidence for the future.”

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Building understands that ISG’s top team was called into a meeting last night to be told a deal was on the cards.

Once signed, the deal will bring an end to eight years of ownership by Cathexis and follows months of speculation about the future of the business which at one stage saw it forced to issue a denial about the state of its finances.

Cathexis, run by a 30-something Texan billionaire called William Harrison, paid £85m for ISG in February 2016 after a weeks-long takeover battle which saw it offer an initial £71m the previous December.

Then chief executive David Lawther was replaced by Paul Cossell who stepped down at the end of 2021 before being replaced by Matt Blowers.

But last November, ISG was forced into issuing a statement in an attempt to reassure firms about the state of its finances after Building revealed Blowers had been meeting concerned firms to reassure them all was well after weeks of rumours about its financial health.

The new owner will have to work hard to win back the confidence of staff, whose CVs, rivals have said, have been landing on their desks, and the supply chain, some of whom have decided not to work with ISG anymore because of worries over getting paid.

Speaking before this morning’s announcement, one firm told Building yesterday: “We’re now having late payments from them across two jobs. We’ll be finishing these two live jobs with them as soon as we can and giving them a wide berth going forward.”

In its last set of published results, ISG saw income slip to £2.19bn in 2022, from £2.26bn the year before, while pre-tax profit was down 38% to £11.5m.The firm’s 2023 results are expected some time between now and September.