Four deals in one day

Deal makers from Hart Shaw Corporate Finance and legal firm, HLW Keeble Hawson LLP have completed the sale of four businesses on the same day. The four independent businesses, franchisees for a leading mobile phone operator, were all acquired by Talk Direct (Leeds) Limited, a company that has consolidated a number of other franchisees in the recent past.

Hart Shaw Corporate Finance

WAP Communications Limited, 24-7 Connect Limited, 635 Connect Limited and Crystal Connect Limited are all based in South Yorkshire and are independent companies with common shareholders.

Dan Fountain, Joint Managing Director of the Companies comments “Having been one of the earliest franchisees for this mobile phone brand we have consistently innovated to deliver the growth required. We realised that the market is moving to larger “super franchisees” and that long term value could only be generated by consolidating our companies into a larger structure. For this reason we worked with Hart Shaw to identify a strategic acquirer. Talk Direct are already a significant player in the market and the acquisitions strengthen their position within the franchisee network”  

Steve Bell, Head of Corporate Finance at Hart Shaw comments “The companies are long standing clients of the practice and real value was generated through the identification of a strategic acquirer that would pay a premium to secure these companies. Whilst the transaction in itself was straightforward, complexities arose out of the fact we were dealing with four independent companies alongside a Franchisor that had a right of veto.”

Chris Wilson, Corporate Partner at hlw Keeble Hawson comments “The need to co-ordinate the sale of four separate companies on the same day posed a number of logistical challenges.  These were overcome largely through the close co-operation between the Sellers’ legal and financial teams.  The transaction also demonstrates that, given the right clients and professional advisors, there are corporate deals to be done in South Yorkshire which bodes well for the year ahead.”

Steve Bell, Head of Corporate Finance

steve.bell@hartshaw.co.uk

Hart Shaw Corporate Finance

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JMC Aquatics Limited acquires aquatics division of Pedigree Wholesale Limited

JMC Aquatics Limited, the leading importer and wholesaler of ornamental fish and accessories, has acquired the aquatics division of Pedigree Wholesale Limited for an undisclosed sum.

Sheffield based accountants and business advisers, Hart Shaw and law firm Wake Smith, acted on behalf of JMC.

Pedigree Aquatics is based in a 14,000 ft² leasehold facility in Nottingham and has a broad base of trade accounts which will compliment the existing JMC business. Jane Flaherty, Managing Director of JMC, commented: “Pedigree is renowned for its quality and service and is a fantastic strategic fit with the core JMC business. The opportunity to acquire the Pedigree business made excellent strategic sense as it allows JMC to service a larger client base whilst maintaining the quality of our service. Already there is incredible enthusiasm amongst our customers and suppliers. The support we received from Hart Shaw and Wake Smith was invaluable and ensured that the transaction was delivered on time”.

Steve Bell, Head of Corporate Finance at Hart Shaw said: “As a long standing client of the practice we welcomed the opportunity to assist JMC with this transaction. It is clear that the acquisition of Pedigree is the first phase of a long term strategic plan to develop the business. The fact that we were able to structure a transaction that minimized the risk has meant JMC can take this first strategic step safe in the knowledge that the core business is secure.”

Barry Gregory, Partner at Wake Smith LLP, commented “Wake Smith has acted for JMC for many years and were delighted to have done so on this occasion. Working closely with Jane and Hart Shaw we were pleased to have been able to assist JMC in completing this exciting stage of their ongoing development plan”

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£95m boost for small businesses

Small and medium sized businesses in England could benefit from £95 million in government investment.

The government funding, announced on 10 November will support small and medium-sized enterprises (SMEs) considering investing in new capital assets. The government expects the funding to unlock around £500 million of new investment and create at least 4,000 jobs.

The money forms part of the government’s £1.4 billion Regional Growth Fund, which supports projects that can create jobs, are based in areas dependent on the public sector and are supported by private sector investment.

The new scheme will provide grants designed to support SMEs considering investment in new capital assets and creating new employment but which have been unable to secure commercial funding for their projects.

These schemes will directly help SMEs that want to invest and create new jobs. They will deliver a shot in the arm to local communities and help small businesses drive local growth.

RBS, NatWest and HSBC have agreed to facilitate the distribution of the £95 million. To qualify for the scheme run by NatWest and RBS, SMEs need a turnover of less than £25 million. To qualify for the HSBC scheme the SME will need a turnover of less than 50 million euros.

SMEs can qualify for a grant if they are going to invest in new capital assets, such as plant and machinery, and create new jobs but cannot get normal bank finance. Grants of up to £500,000 will be awarded alongside the award of a new bank loan on commercial terms.

For further information about business grants please contact Steve Bell, Head of Corporate Finance on T: 0114 251 8850 or email: steve.bell@hartshaw.co.uk.

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2011 – A very tough year

Anyone watching the news recently cannot avoid the general feeling of doom and gloom; the collapse of the Euro, inflation at 5% and minimal economic growth. In the face of these factors business continues to be challenging.

In a recent on-line blog someone asked whether the fact that the economy is not growing is relevant to your business? I would suggest that the answer has to be NO!

A client recently stated that he can’t waste time bemoaning the global economic crisis and the fact that funding is more expensive and restricted as all these factors are outside of his control. Every business faces tough decisions but those that are successful identify and actively manage factors that are in their control. In the past many businesses achieved success without having to try; sales were easy to achieve and profits and cash were generated. In 2008 things changed and since then we see continued pressure on margins and people chasing sales. Business owners have to work harder to seemingly stand still. In the face of these pressures we advise our clients to be as efficient as possible and manage costs. We help our clients identify their aspirations and ensure that each decision becomes a step towards those goals.

The continuing economic turmoil is leading many business owners to consider their next step. As the days of high multiples and inexpensive bank debt are long gone, our experience suggests that Vendors need to be open minded when looking at transaction structures. Many deals are being completed that include higher proportions of deferred consideration and therefore in order to generate value advisers have to look away from the straightforward and deliver innovative deal structures.

Transactions are now likely to include deferred consideration, share options, loan notes, earn outs and deferred purchase. Comparing offers with a mix of consideration takes skill with the focus on long term value at the expense of short term certainty.

Our prediction for 2012 is that the economy will continue to present challenges. Our focus is on supporting all of our clients, ensuring they end the year in a stronger position than when they started. Uncertainty and caution will continue to suppress the transaction market but we expect to see a steady flow of deals, however to secure the deals Vendors have to be open-minded.

Steve Bell, Head of Corporate Finance at Hart Shaw.

T: 0114 251 8850, email: steve.bell@hartshaw.co.uk.

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The Business of Timberline Limited sold to Metalliform Holdings Limited

Following the appointment of Administrators from Hart Shaw, the business of Chesterfield based outdoor play equipment manufacturer, Timberline Ltd has been sold to Metalliform

Timberline Limited sold to Metalliform Holdings Limited

Holdings Ltd.

Timberline, which operates nationwide, also manufactures timber buildings & shelters from two large factories on the Foxwood Industrial Park, and has been trading for over 20 years. The Company suffered a severe down turn in business, as a result of the impact of the public sector spending cuts in the education market. The Company was placed into Administration on 2^nd November 2011 and Christopher Brown & Andrew Maybery, partners at Hart Shaw LLP, in Sheffield were appointed its Joint Administrators.

Metalliform, an experienced school furniture and stadium seating manufacturer based in Barnsley, are ideally positioned to turn the business round whilst also introducing new options into the product range.

Joint Administrator, Christopher Brown of Hart Shaw LLP, said: “Following our appointment we continued to trade the business while we marketed it for sale. We are delighted that the sale of the business is now complete. This is a fantastic outcome for all stakeholders – employees and creditors – of the business and the acquisition by Metalliform has saved 45 jobs.”

The Joint Administrators received support from the Corporate Finance team at Hart Shaw. Steve Bell, Head of Corporate Finance, said “The underlying business of Timberline has strong brand recognition and we attracted a high level of reputable companies looking to secure the business. The nature of the administration was such that we had to react very quickly and were able to prepare the information pack and arrange site visits shortly after appointment with the result that the sale was completed within 6 weeks.”

Metalliform has manufactured furniture for schools, colleges and universities for more than 60-years.  The company employs 90 staff at its Barnsley production site and has a turnover of £8m.    

Peter Brier, Chief Executive of Metalliform Holdings, said: “Timberline is a business that has a good customer base and a skilled workforce. We are very pleased to have concluded this deal quickly as this presented the best chance to preserve jobs. There are good synergies between the two businesses in terms of operating markets and manufacturing capabilities. We plan to use these to the benefit of both businesses.”

In addition to school furniture, Metalliform also manufactures and installs sports stadium seats through its subsidiary company Arena Stadium Seating. 

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Access to finance help for Yorkshire businesses

Yorkshire companies are set to benefit from a special event featuring experts from the banking and finance world aimed at helping them secure funds for business growth.

Law firm Irwin Mitchell is hosting the event as part of its 2011 Autumn Seminar Series in order to discuss and promote business innovation and growth within the region.

The free event, “It’s All About The Money”, on Tuesday 4th October will give companies the opportunity to find out about all aspects of business finance.

Financial specialists speaking at the event include:

• Hart Shaw – Steve Bell, Head of Corporate Finance will talk about the ‘fundamental challenge’

• Lloyds Banking Group – Chris Perkins, Relationship Director and Paul Varley, Senior Manager Commercial will give tips on how to work with your bank and an update on the banking sector

• Finance Yorkshire – Ian Howson, Investment Manager, Business Loans and Ash Chopra, Investment Director, Equity Linked Finance will talk about gap funding and how Finance Yorkshire can help businesses

• Yorkshire Association of Business Angels – Catherine Kennedy, South Yorkshire Ambassador will cover ‘Angel investment – where does it fit and what you need to know to get it’

• The FD Centre – Andy Collier, Regional Director will talk about the role of the finance director in maximising your chances of getting the funding you need from the correct sources

James Bullock, Partner in the Corporate team at Irwin Mitchell, hosting the event, said: “Business owners tell us that access to finance is one of the biggest issues at the moment. There are many good companies who are looking to grow and need some injection of capital in order to give them a boost. However there are ways to get access to funding and this event aims to arm people with the information and knowledge to be able to improve their chances of securing the help they are seeking.

“There is a great line up of speakers and we urge people to take advantage of this fantastic free event.”

This event is being hosted by Irwin Mitchell at their Sheffield office from 8am till 11am.

Places are limited so people wishing to attend should email melanie.parker@irwinmitchell.com or call 0114 274 4489 as soon as possible.

Click here to view Hart Shaw’s events calendar.

Selecting the right advisers increases business value

Whilst acquisition and disposal activity is a long way short of that seen during the boom years, our feeling is that there is some stability returning to the market within South Yorkshire and the wider region. The recent decision by the Bank of England MPC to hold interest rates at the historically low rate of 0.5% is likely to provide an added level of comfort to business owners.

Hart Shaw Corporate Finance

The Government’s focus on lending to SME businesses through Project Merlin continues, however, it is our feeling that the Banks are still highly cautious in their approach to lending.

Against this backdrop of fragile confidence we are acting for a number of companies who are looking to grow their businesses through acquisition. These clients range from niche engineering businesses that recognise the need to diversify to entrepreneurial businesses that are simply looking to target quality companies at reasonable prices.

As a firm we are now seeing more harmony between a realistic vendor expectation and acquirers who are willing to pay more than a rock bottom price. This understanding is helping to drive the M&A market forward meaning transactions are more likely to get completed.

The increase in activity within the M&A market is not only acquirers picking up distressed businesses at bargain prices. There are a number of businesses in the enviable position of delivering strong profits and cash flow and consequently are very attractive to potential acquirers resulting in the vendor being able to command maximum value.

It is important to consider that a high proportion of companies both looking to buy and looking to sell may not be actively marketing this fact. It is therefore important for vendors looking to maximise their value to select the right advisers. A significant amount of time and resource needs to be invested when finding a buyer, the right advisers will have the experience and research tools at their disposal to enable them to identify the strategic acquirers and understand their motivations for an acquisition. This means that the business for sale can be presented in the most appropriate manner, getting the acquirers interested and willing to pay a price that reflects the full value of the business.

If you would like to discuss your business’ M&A strategy please feel free to contact Hart Shaw for a free, no obligation meeting.

Steve Bell, Head of Corporate Finance

steve.bell@hartshaw.co.uk

Hart Shaw Corporate Finance

Is there a brave new world?

It is now approaching three years since the collapse of Lehman Brothers started the worst recession in living memory. The recession saw the end of the labour government and heralded

Hart Shaw Corporate Finance

the first coalition government in over 60 years. Amid cries of deceit and broken promises the Lib-Dem’s appear to have taken the brunt of the backlash against the cuts but it is clear that difficult decisions would have to be made irrespective of the flavour of government.

The austerity measures imposed by government, primarily focused on the public sector, reflect the cost cutting measures made by the majority of businesses in the last three years. Against this backdrop we have worked closely with our clients to ensure that their businesses are fit for the present whilst ensuring they are prepared for the future, our advice reflecting the old adage “plan for the worst, hope for the best”.

It is now spring and tender shoots of recovery are visible. In this climate many businesses are now looking to the future with plans for growth but the fundamental challenge is how to fund this growth. The instability in the banking market, tightening financial regulation and the increased cost of money has created a banking system that is highly risk averse. The prudence shown by banks and the significant increase in the cost of money has led many businesses to chose to delay investment decisions, investigate alternative sources of external finance or take a long term view to fund these from own resources.

Against this climate of uncertainty we continue to work with our clients, helping them towards achieving their long term goals. At a time when the volume of merger and acquisition work has reduced, the desire for shareholders to secure a successful exit from their business is as great as ever. Whilst we may not have completed the high profile transactions achieved in the past we are pleased that the deals we have completed have secured real value added for our clients.

Our flexible, pro-active approach been the cornerstone of our success and we continue to attract new clients because of our belief in providing practical client focused advice. There are opportunities for acquisitive businesses and our ability to deliver a coordinated service across Audit, Accounts, Corporate Finance, Tax and general advice ensures we can support all our clients irrespective of size.

Steve Bell, Head of Corporate Finance

T: 0114 251 8850, Email: steve.bell@hartshaw.co.uk

http://www.hartshaw.co.uk/corporate_finance.htm

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Latest deals for Hart Shaw Corporate Finance

While larger deals tend to steal the limelight it is reassuring for all Hart Shaw clients to know that they have access to all our value added services, such as specialist tax and corporate finance work.

In recent months Hart Shaw’s Corporate Finance team has worked with a wide range of clients helping them lay the foundations to achieve their long term business goals.

Whatever the size of a business, planning for an exit strategy, a management buy-out or going on the acquisition trail requires the backing of a dedicated team of advisers. Already in 2011 Hart Shaw has acted as lead adviser to three key deals.

A Management Buy-Out at Sheffield Electric Co. (Contractors) Ltd resulted in new ownership for the well established electrical contracting & installation business. The transaction was completed by Derek Milner, who had been with the business for 30 years, and now allows him to participate in the future growth of the business.

An ‘out of town’ deal saw Hart Shaw advise London based GGS Compressors Ltd (trading as GGH Hire) on the acquisition of Hire Mate Ltd which boosted combined turnover of the construction and utility based plant supply business to over £4.2m.

Advice in respect of a restructuring of the shareholding of local brewery supplier, Hallamshire Brewery Services Ltd, allows the shareholders to continue to invest for long term growth and was the result of the Tax Planning and Corporate Finance Teams working closely to deliver a structure that delivered real value to the client.

New Head of Corporate Finance, Steve Bell comments: “Our principal focus is on supporting our clients with their strategic, corporate and personal goals. Businesses continue to face challenges as a result of the current economic climate and the continued nervousness of banks to lend money. In this environment we continue to deliver innovative solutions to the issues faced by all our clients.”

To speak to our Corporate Finance team please contact Steve Bell on T: 0114 251 8850 or email steve.bell@hartshaw.co.uk.

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