Corporate Finance Case Studies
Whether you’re looking to buy or sell a business, or simply require funding for your next acquisition, you will need an experienced team of dealmakers who can help you through as much or as little of the process as you require. HSKSG Corporate Finance have many years of experience helping our clients complete both simple and complex transactions.
Below are just a few examples of the different types of projects we have successfully carried out for our clients. Drop us a line for a no-obligation appointment to discuss how we can help you to achieve your aims and ambitions.
Bank Funding Proposal
How Did HSKSG Get Involved?
HSKSG Corporate Finance were introduced to a five-home care home group by their bank, who had funded the group up to four homes but were unable to finance the fifth acquisition due to insufficient management information produced by the client.
What Did the Client Want to Achieve?
The group were looking to acquire a sixth home and their bank had advised them that they should talk to HSKSG Corporate Finance, with a view to preparing a funding proposal for an £11million funding line.
To fund their fifth acquisition the group had borrowed from a second-tier lender at significant initial cost and interest rates and although profitable they were leaking cash because of the cost of capital.
Having been turned down by their bank on their fifth home, the client was understandably reluctant to consider them for their next acquisition, but the team from HSKSGCorporate Finance explained to them what they needed to do to get the money at the right price and from the right funders.
Unfortunately, the information being prepared by their current advisers was not fit for purpose. These was no structure to the group, no tax planning and no obvious control of cash and the accounting records were unfit for the size of group.
How Did HSKSG Corporate Finance Help?
The initial meeting went extremely well, and our detailed research paid off as we were able to suggest some immediate wins for the group.
By putting together a funding model fit for purpose, the HSKSG Corporate Finance team of Colin Peacock and Chris Matthews were able to secure the £11million required by our clients. This not only allowed the group to acquire their sixth home, but also to clear the expensive funding line, saving them £100,000 per annum in cashflow.
It was very pleasing to hear that the bank had made it clear to client that they had only got the funding because a member of their credit facility had previously met Colin Peacock and so was aware of our experience in the healthcare sector. The same bank manager also confirmed that our management accounts are the best that the bank see.
Our client was of course delighted with the outcome and we look forward to continuing to work with them on their management accounts and on future acquisitions.
Management Buy-In at Engineering Company
What was the nature of the deal?
HSKSG Corporate Finance’s team advised a client who was acquiring 75% of the shares of a local engineering business, effectively as a management buy-in.
What Role Did HSKSG Corporate Finance Play?
Our involvement included raising the necessary finance to fund the acquisition, advising on all tax related matters and, as the sole corporate finance adviser, getting the best deal for our client.
What Was Unusual About This Particular Deal?
The transaction, which was valued at £4 million, was the first deal we had been involved in which was funded by ThinCats, one of the many peer-to-peer funding groups on the market, rather than a major bank.
The team had originally attempted to raise the funds through the traditional route and had significant initial interest from at least three of the major banks. However, these attempts all failed at the ‘credit hurdle’, which was a source of great frustration.
In contrast, the funding from ThinCats was turned around very quickly and although the interest rates on these deals are often significantly higher than from traditional funders, it enabled the deal to go ahead. HSKSG Corporate Finance prepared the required three-year forecasts for the trading company, holding company and for the group, together with making site visits and liaising with the relevant banks.
What Happened Next?
Once the funding was available, we were then able to press on with the transaction. We continue to work with the client by assisting them with compliance work and completing management accounts for the entire group, as well as providing personal tax planning advice.
Sale of Healthcare Business
What Was the Nature of the Deal?
The sale of a large operator based in the healthcare sector.
What Role Did HSKSG Corporate Finance Play?
Our role was intrinsic to the deal, as we were responsible for sourcing potential acquirers, advising the existing shareholders as well as the management team that were staying onboard, specifically in relation to tax matters and the Enterprise Management Incentives (EMI) scheme which our firm had previously implemented. We also liaised with the Corporate Finance advisers acting for the other side and directly with the private equity house who were acquiring the business.
What Was Unusual About This Particular Transaction?
The sale to a private equity house was a first for HSKSG Corporate Finance and made the deal more complex, as they required numerous due diligence exercises to be carried out, which required us to regularly provide detailed information. Another first was advising the management team who were remaining with the business on the EMI Option Scheme, whilst simultaneously advising the exiting shareholders to ensure there was no element of conflict in the transaction.
How Long Did the Deal Take to Complete?
After liaising with several potential acquirers, a deal was agreed with the buyers in July 2018 and the deal concluded in February 2019.
Who Else was Involved?
The tax team at HSKSG, headed by Tax Director Martin Tomes, was heavily involved in this transaction. Martin’s clear and precise tax advice saved our clients a considerable sum in respect of Entrepreneur’s Relief.
Legal advice was provided by Flint Bishop, who did an excellent job for our client.
What Happened Next?
Whilst our primary aim is to get the very best deal for our client, it is always pleasing when the quality of our work is recognised by the ‘other side’. In this case, the private equity house has asked us to complete the 2018 audit and continue preparing monthly management accounts for the business for an initial six-month period and possibly beyond.
If you are looking to buy or sell a business, contact Colin Peacock at HSKSG Corporate Finance.
So that’s us. What about you?
Drop us a line to discuss all things business, from your aims and ambitions to improvements you’d like to make in the short-term. We are here to help, so contact us to make a no-obligation appointment.