Nicholsons Chartered Accountants and Business Advisers, a member of The Corporate Finance Network, with offices in Lincoln and Market Rasen, has successfully advised their clients on buying back a business they had sold four years previously.
It’s not often that a business adviser will sell and then later buy back a company with the same clients but that happened to Nicholsons. Four years ago, Richard Hallsworth advised his client on the sale of their business to a multinational part of their international expansion plans but it hadn’t worked out so their clients were being given the opportunity to buy it back.
One of the biggest challenges Nicholsons’ Corporate Finance team faced was helping their clients understand how the business would fund itself once it had been de-tangled.
Nicholsons approached this by:-
1) Understanding exactly what the balance sheet would look like on day one. Analysis was undertaken of working capital position and cycle to create a picture of what cash flow would look like over the first three months after purchase.
2) Negotiating a working capital facility from the seller. Nicholsons presented the seller with a solution that saw them provide funding for twelve months but as a loan that would be repaid.
3) Identifying alternative sources of funding that might be appropriate. Using their nationwide contacts, they were able to recommend a number of funding opportunities that were reviewed for their suitability.
This was an exciting project for both Nicholsons and their client that posed many challenges to work through. They worked closely with their client’s solicitor to ensure a great result for our client! For them the hard work of rebuilding now starts but with an understanding of their cash flow, working capital funding in place and other funding options identified they have a great platform to start from.