The leadership of the collapsed offsite construction specialist Merit has announced a fresh start, launching a new business from the remains of the failed Northumberland group.
A Phoenix from the Ashes
Newly incorporated Merit Industrialised Construction Limited has acquired key assets from its insolvent predecessor. The venture is backed by significant players in the construction sector: Modulex Modular Buildings plc, a global modular construction firm supported by Red Ribbon Asset Management, and HBEM, a specialist in advanced manufacturing facilities.
The business will be led by familiar faces, including founder Tony Wells and chair Kirsty Wells. In a statement, they acknowledged the difficult impact of the administration of Merit Group and Merit Holdings on suppliers and staff, which resulted in nearly 300 job losses in November. They stated the new entity allows valuable intellectual property and technical innovation to continue within a newly capitalised organisation.
CEO Tony Wells said: “Merit represents a new chapter. The business has been established with new investment partners, new governance and a refreshed operating model.” He added that the focus would be on design, manufacturing, and delivery excellence, supported by strategic investment.
Financial Details and Creditor Shortfall
The launch is supported by an initial equity investment of approximately £900,000 from shareholders. According to administrator documents, a £896,000 deal secured customer contracts, work in progress, plant, equipment, and a licence to occupy the Factory 2 site for Merit Industrialised Construction. The deal includes an option to purchase the factory for £6.86 million when the licence expires.
The scale of the former group's financial troubles is laid bare in reports from insolvency specialist Interpath:
- Merit Holdings had a total deficiency exceeding £25 million, with an estimated £16.8 million owed to unsecured creditors.
- Merit Group Services showed an estimated total deficiency of £19.45 million, including £9.6 million owed to unsecured creditors.
- Merit Health Ltd's statement of affairs revealed a total deficiency of £20.38 million.
Former Headquarters Hits the Market
Meanwhile, administrators are seeking to recoup funds by selling the former Merit headquarters. Advisory firm Watling Real Estate has been instructed to market the 8 Silverton Court office building on Cramlington's Northumberland Business Park.
The purpose-built, three-storey property spans 10,106 sq ft and was partially occupied by Merit until the group's demise. Watling is inviting offers for either the freehold or leasehold of the prominent office block.
Rob Cruikshank, associate director at Watling, said: “This is an exciting opportunity to acquire a modern purpose-built office building that is prominently positioned at the front of Northumberland Business Park.”
The launch of Merit Industrialised Construction marks a determined effort to salvage expertise and assets from a major regional business failure, while the sale of its former base underscores the lasting financial repercussions of the collapse.
