Dawson Holdings has virtually exited the news and magazine distribution business after announcing last night it had sold the assets of Dawson News for £2m to rivals John Menzies and Smith News.
Rival Smiths News said it had spent £1.5m on Dawson assets, while John Menzies paid £500,000.
The two businesses have won a number of large contracts worth in excess of £500m from ailing Dawson in recent months to distribute the products of publishers including Trinity Mirror, News International, Telegraph Media Group and Associated Newspapers.
About 1,800 of Dawson’s staff will now transfer to Smiths with a further 700 remaining staff transferring to Menzies after Dawson Holdings put the distribution business, run by subsidiaries Surridge Dawson and Solent SD, into administration yesterday.
Smiths said that the purchase would add about £250 million to its sales over the next 12 months. It has acquired most of the assets of Surridge Dawson, including 20 of Dawson’s depots across the UK.
Menzies has snapped up the remainder of Surridge Dawson’s assets, including the temporary lease of premises, other wholesale distribution assets including systems support departments.
Dawson said that it did not expect to receive a payment from its disposals as the value was less than the amount owed to the creditors.
The company has three remaining businesses, Dawson Media Direct, which supplies newspapers and magazines to airlines, Dawson Books, which supplies books to academic institutions and Dawson Marketing Services.
Nigel Freer, chairman of Dawson Holdings, the parent company, said: “Regrettably there is no viable alternative for Dawson News, other than its administration. However, our three continuing businesses carry on trading normally and we have great confidence in their future.”