Manchester-headquartered delivery tech firm Sorted Group Holdings is set to be sold for £1, subject to shareholder approval.
The news comes just two years after Location Sciences completed its reverse takeover of the delivery tech platform Sorted in a £66.73m reverse takeover deal.
As part of the deal, Sorted Holdings Limited was renamed Sorted Group Holdings and admitted to the AIM market of the London Stock Exchange on Monday February 19, 2024.
Simon Wilkinson, the former CEO of Mobica and chairman of Location Sciences, was appointed chairman of Sorted.
He said at the time: “It’s been a long road to complete this transaction but all along we’ve believed that Sorted has the potential to once again be a leading player in the eCommerce space.
“Now with our shareholders and team in place we can begin to execute on that opportunity.”
Wilkinson was an investor in Sorted, alongside Mahmud Kamani, the founder of Boohoo Group, and Richard Hughes, the founder of Zeus Capital.
Restructure
Since the acquisition, the board has undertaken a significant restructure, including reducing staff numbers from 90 to 37, closing its London office, and selling its Clicksit App for £775,000.
In a statement to the LSE this morning, the company said: “Notwithstanding the above progress, as a Software as a Service business that remains in its growth phase of development, it remains apparent to the board that the business continues to require significant cash consumption in order to scale and reach profitability in the medium term.
“Sorted Holdings Limited has benefited from approximately £71.07m in equity investment and approximately £4.36m in debt financing. More recently the business has benefited from a £2m equity raise and the ongoing loan facility agreement with Bidco 3 Ltd.
Delivery platform that raised $100m in investment is sold for £66.73
“The board believes that committing further significant investment towards enhancing elements of the business is not in the best interests of shareholders.”
The disposal will take place in the form of the sale by SHL to the buyer of the entire issued share capital of SGL for a nominal cash consideration of £1 and become an AIM ‘cash shell’.
The buyer is only listed as Bristol-registered Brislington Holdco Limited.
The company statement added: “In addition, as part of the disposal, Shard and Shard Credit Holdings Limited have entered into a deed with each of SGL, SHL and Clicksit App Limited (the obligors) under which Shard releases the obligors from all obligations and security granted to Shard, including the funding facility under which SGL currently owes £3.52m to Shard, conditional on, and taking effect on the day following.
“In addition, as of April 1, 2026, the other members of the group have agreed to release SGL from all obligations, including indebtedness, owed to them and security granted to them outstanding at that date.
“The board of directors of SHL, with the support of the board of directors of the company, consider that the disposal will benefit SHL and that the consideration of £1 being paid for the entire issued share capital of SGL represents the fair market value of SGL, because SHL and other members of the group are being required to provide financial support to SGL as it is loss-making, and both boards consider that the outcome for the employees of SGL will be better under the stewardship of the buyer.”
Following the disposal, the directors intend to place SHL into liquidation.
It is anticipated that the company will have monthly operating costs of approximately £18k.
The company’s proposed strategy, following completion of the disposal, will be to acquire one or more companies and or projects which are either cash flow generative or show significant potential for growth and a profitable exit.
Sorted was ‘poster boy’
The global software company was launched in 2010 by David Grimes but ran into financial difficulties after raising nearly $100m in investment.
In January 2024, BusinessCloud reported how Location Sciences had agreed to buy Sorted for £66.73m, as well as take on the global software firm’s debts of £4m plus interest and invest £3m of capital.
Sorted reported a loss before tax of £28.6m in the year to September 2022, compared to losses of £14.1m in the previous year.
The company’s customers include M&S, Asda and Boohoo.
At its height in 2021, Sorted closed a $40m (£30m) Series C investment round led by Chrysalis Investments and Arete Capital Partners.
The investment came less than nine months after Sorted raised another $15m (£11m) to fund future growth.
In January 2021, Sorted saw 243 per cent year-on-year growth as it was named by the FT as one of the fastest-growing companies in Europe.
However, the company’s growth had not kept pace with its forecasts and it never returned a profit.
On June 28, 2023, Location Sciences announced that it had entered into exclusive non-binding heads of terms regarding a potential acquisition and outlined its plans in an admission document published on January 30, 2024.
Simon Wilkinson was approached for comment this morning.