Wanting to sell leads on to other things
A professional contact introduced us to a proprietor of a very long established business. The proprietor had been approached by a broker who said he had a buyer for his business and wanted to meet up. The proprietor soon realised the broker did not have a specific prospective purchaser and was in fact fishing for opportunities. However, it got the proprietor thinking about selling up. Following our introduction and discussions, it was evident that the proprietor wanted to sell the business because he had a number of problems eating away at him. The main problem was that the bank was not willing to provide additional funding unless he gave more security through personal guarantees. He was of an age where he did not want to do this as he didn’t know how long he could run the business. When we assessed the state of the company we could see that the core business was profitable and turnover was growing but it was seriously underfunded to the point that there was always pressure from HMRC and larger suppliers. We set about solving this problem using our network of contacts. Within a very short timescale the company had an offer of finance for an additional £400,000. HMRC and key suppliers were brought up to date and the company’s liquidity was no longer a problem. We then assisted in dealing with numerous other issues we became aware of which resulted in the company immediately saving over £26,000. The company’s accountants and solicitors were included in an action plan to help with other issues which will benefit in even more savings. As regards the value of the business, we saw numerous problems which would pull the value down if he put it on the market immediately. There were numerous issues that would create major hurdles for any prospective purchasers to buy the business. All the issues could be rectified given time so we agreed a strategy for the next year or two. The business will be “sale ready” shortly and we have been told we will be dealing with the sale. The professional firms involved in success stories like this are local and know our capabilities. This is how our reputation...
Read MoreBusinesses may have different values!
A proprietor of a small new venture company was introduced to us by a professional contact. The proprietor wanted to know if we could help raise additional finance for an overseas project. Whilst considering options we identified that a large multi national group could be interested in the new company. The net asset value of the company was minimal and therefore an initial offer of £15,000 was eventually received by the multi national. We further investigated the potential value to the multi national and it led us to believe the intellectual property was much more valuable to the multi national than first thought and way beyond our clients expectations. The client therefore asked us to lead negotiations. A long process followed culminating in face to face meetings at which we our presented our client’s position. Offers and counter offers were made to the point both parties were still wide apart on value. (The multi national were not wrong either in that the value of the business to anyone else was minimal). We finally brokered a deal for the company to be sold for over £700,000. Our parting shot was that the purchaser pay the costs of the client’s own solicitors and our costs. They agreed. The clients accountants and solicitors finalised the mechanics of the deal. The client was very happy and his professional advisers were even happier to support their...
Read MorePreventing uneccessary insolvency appointments
We were asked to assist a director of an insolvent company facing pressure from the bank. The bank were demanding that an Administrator be appointed to take control of the business. We very quickly came up with some ideas but we needed to buy some time to consider the options more fully. We therefore helped the director negotiate more time from the bank. In that time we reviewed the position and obtained further advice and valuations to devise a workable solution. A meeting with the bank was then arranged at which we explained our suggestion to resolve the problem. Given the fact that an insolvency appointment would most certainly devalue the property assets, and prove costly, the bank listened to our proposals. We also had to assess the impact on other creditors so that their position was not worsened and that the wrongful trading provisions did not cause a problem for the directors. Once the bank took their own advice they came back to us and confirmed they were agreeable to the strategy with a timescale of 12-18 months. This kind of strategy works very well when we get involved early and before the banks make an appointment. We have a great deal of experience formulating these exit routes, so if you are facing financial pressure and think there is no way out just contact us to see if we can...
Read MoreFormulating a strategy to save a business
We helped a proprietor of two businesses facing severe financial pressure from a major creditor negotiate a better deal than was on the table. The business could not repay the major creditor within the timescale demanded. The creditor suggested a take over of the business at a value equivalent to the debt due. It was then proposed that other additional debts due from the proprietors associated business be repaid over a few years. This could have had a catastrophic effect on the associated business. The proprietor felt trapped and even though he did not like the deal he couldn’t say any alternative. The advising accountant knew it was not a good deal and suggested the client talk to us to seek an additional opinion and discuss alternative options with a view to negotiating an exit. We suggested a number of alternative methods to make a counter offer. We mentored the client and assisted him in formulating a precise negotiation strategy. The client stuck to the formula and succeeded in agreeing to a deal well over £200,000 better than initially offered. The client was very grateful for the advice and pleased he salvaged one business and eliminated a very large...
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