2e2 in administration

NHS trusts including Sussex Partnership NHS Foundation Trust face an uncertain future on their IT services after their supplier 2e2 went administration. 

Systems integrator 2e2 has placed tens of its UK companies into administration.  An unknown number of former NHS IT staff, transfered to 2e2 under TUPE arrangements, now face redundancy.

2e2 has several NHS customers including Sussex Partnership, which signed a contract worth a total of £36.8m over seven years with 2e2 to outsource its ICT services last year.

A trust spokesperson said it was notified on Tuesday morning that 2e2 Holdings Ltd had entered into administration.

“We are now working closely with 2e2 and the administrators to ensure service continuity and progress on our ambitious IT programme.

“2e2 is only one part of a programme to revolutionise our information and communications technology.”

NHS North Central London Cluster, the commissioning arms of Barnet, Camden, Enfield, Haringey and Islington primary care trusts, has also outsourced its IT services to 2e2.

2e2 provides IT managed services and integrated technology solutions with operations across UK, Ireland, Benelux, Spain, USA, Channel Islands and the Isle of Man.

Around 2,000 staff are now at risk of redundancy. This group will include a number of former NHS employees who were transferred to the company under TUPE arrangements when their department was outsourced to it.

Simon Granger, Chad Griffin and Simon Kirkhope of FTI Consulting have been appointed as joint administrators over ten companies in the 2e2 Group.

Granger said: “We are working closely with management and other key stakeholders to ensure the continued provision of business critical services to the group’s customer base.

“In parallel we are exploring strategic options for the UK business and have commenced a disposal process for the overseas subsidiaries."

FTI said 2e2’s UK directors took steps to place some of the group’s UK companies into administration following the failure to secure additional funding for the business.

Technology website The Register reported earlier this year that 2e2 had broken its banking covenant in December and was running up to its credit limits in distribution.

2e2 released a statement to eHealth Insider in response to the article saying the company had a, “strong underlying business” and remained “highly focussed upon our NHS and health customers which are core to our vision."

“We have not missed any bank interest payment and the interest that we actually have to pay is smaller than the total interest that has been cited in the past,” the spokesman said.

He added that the company had been in discussions with its banks regarding refinancing for “a while” and expected this process to take a few more months to conclude.

EHI is awaiting comment from 2e2 on today’s announcement. The company’s website is currently down.

The Berkshire-based business was formed in 2002 and grew significantly through a mixture of organic growth and strategic acquisitions. In 2011, it generated £395 million of revenue.

The international businesses of 2e2 continue to operate as normal.

The 2e2 companies in administration are:

2e2 Holdings Limited

2e2 Investments Limited

2e2 Group Limited

2e2 Managed Operations Limited

2e2 Property Limited

2e2 Limited

2e2 UK Limited

Morse Overseas Holdings Limited

Morse Group Limited

Diagonal Quest Limited.