Torex Retail sold amidst 'breathtaking corporate governance issues'

Torex Retail has announced the completion of its sale to private investment firm, Cerberus European Investments.

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Torex Retail has announced the completion of its sale to private investment firm, Cerberus European Investments.

The troubled retail software firm had been facing financial problems since the end of last year, when it issued a profit warning and suspended trading in its shares on 26 January. It has also been in dispute with its former chief executive who left the business this month.

Cerberus will purchase of all of the businesses and trading subsidiaries of Torex Retail for £204.4 million, in addition to which Torex has assumed associated subsidiary company liabilities, following talks the software maker had previously said were ongoing with an unnamed investor.

Chairman of the Torex Retail holding company, Steve Marshall, said in hte official announcement "The sale of the business was the only viable option available to the board and it was achieved despite breathtaking corporate governance and financial issues at PLC level, the scale and extent of which neither I nor my board colleagues have seen in corporate life."

Torex said the transaction will enable it to consolidate, grow and reposition itself as the leading global independent supplier of retail software. It will also allow Torex to move beyond issues that have impacted the former holding company, which is not being acquired. Torex management will focus on solution development and business integration.

UK general Retail divisional managing director, Doug Hargrove told ComputerworldUK's sister pubication CIO that, since the company was put up for sale in January, it has been business as usual, while the management issues have been addressed. He added: “The new owner has a long-term commitment and operational expertise. There has never been a doubt about the quality of Torex’s product base or our commitment to our strong customer relationships and this change of ownership will enable us to genuinely integrate the businesses and build on our already leading market position.”

Some industry commentators have questioned the viability of Torex business in response to its highly acquisitive strategy, buying no less than 13 other vendors in the last four years. The UK Retail business alone includes KPOS, Alphameric Retail, Anker UK, Radii, XN Checkout and Retail-J.

Ovum analyst Phil Codling, said, “This is a sorry end to the sorry story of Torex Retail. The firm will be remembered not just for its ambitious string of retail sector purchases and its strategic and operational failure to turn these into a viable, integrated business but sadly also for its unfolding scandal.

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