Long-Term Strategic Assistance

A good illustration of the range of work we do comes from a client with whom I have been working for over 4 years. This period has seen us work with him through an MBI, guide him through the challenges presented by the rapid growth of his business and now includes a focus on future acquisitions.

Our introduction came when our client, a very successful sales director in the packaging sector, was looking to buy a company to run himself. He wanted to repeat his previous success but this time in his own business, via a Management Buy-In (MBI). We worked together on the negotiation of the terms of the deal, raising bank finance and minimising his personal risk and financial input. The deal, completed in November 2006, comprised an initial acquisition of a 75% shareholding, with put and call options in place governing the transfer of the remaining 25%.

Since the acquisition, I have worked very closely with the company on an ongoing basis, advising and assisting as the business has grown and the owner has made the transition from sales director to managing director. This work has included:

  • Introducing a structure of regular management meetings to review performance and guide the business
  • Working on the visibility and understanding of what drives the company’s cash flow and ensuring the company manages this appropriately
  • Working with the company’s accountant to improve the quality of financial information available
  • Creating a method for reporting and assessing the sales performance from the company’s sales staff and agents, the key influence on the business’ performance

In 2009 we raised additional finance to allow the acquisition of the outstanding 25% shareholding, giving our client 100% ownership and greater flexibility as the company moves forward.

Key achievements since the initial buy-in have been:

  • Turnover has more than doubled
  • Significant geographic expansion
  • Growing profits
  • No cash flow stresses

At present, the business is performing very strongly and is in an excellent position to move forward. We are now working on potential acquisitions while ensuring that the way in which the business is managed keeps pace with the rapid development of the company.

Neil Grimmond
About the author

Neil joined Craig Corporate in 2005 and has been involved with both corporate finance and business management assignments. Corporate finance projects have ranged from diligence to...
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by Neil Grimmond