Invoice financing for SMEs

There has been a lot of publicity recently on the availability of finance for small to medium sized enterprises (SMEs), particularly focusing on traditional bank loans or equity investments.

However, as Hart Shaw notes, there are other forms of business funding which should also be considered as an alternative source of money for firms.

Invoice finance is a solution that is being increasingly used by companies to deal with late payments whilst also improving cashflow. This is where a finance provider pays an agreed proportion (usually 80-85 per cent) of approved invoices to the company on receipt of a copy of the invoice. The balance (minus a small charge) is paid upon client payment.

Patrick Abel, Corporate Finance Partner at Sheffield-based Chartered Accountants, Hart Shaw said: “With the economy growing, there has been a surge in demand for working capital in the SME sector that has created lots of opportunities for more invoice financing. Despite this, its current use is relatively low compared to ‘traditional’ sources of lending. In fact, only around 43,000 SMEs out of a total of nearly five million in the UK are currently using invoice finance.

“Whilst invoice financing is available from the banks and independent providers, one of the major problems is that there is a general lack of awareness by SMEs of the advantages of utilising this source of funding.”

For more information please contact Patrick on 0114 251 8850 or patrick.abel@hartshaw.co.uk.

 

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Success for Hart Shaw Corporate Finance at Insider Dealmakers Awards

Hart Shaw Corporate Finance were part of the winning team for the Deal of the Year (£5m +) award at the Insider Sheffield City Region Dealmakers Awards.

Acting as lead adviser to Purex International Ltd along with hlw Keeble Hawson Solicitors, Hart Shaw represented directors Andy Easey and Trefor Jones in the purchase of the fume extraction system manufacturer from its parent company Domino Printing Services plc.

The winning team, including Patrick Abel and Joshua Greveson from Hart Shaw Corporate Finance

The awards, which celebrate the successes of a resurgent 12 months in the industry, were hosted by rugby legend Martin Bayfield and held at the St Paul’s Mercure Hotel in Sheffield. Professionals from Yorkshire’s top professional advisory firms were praised for “putting in the hours to get deals in place” and for boosting the region’s economic recovery.

Commenting on the deal, MD of Purex International Trefor Jones, said “An MBO is a complex transaction, in our experience if you are to succeed you need the best advisers available working for you.

“In selecting Patrick Abel at Hart Shaw we had someone on the team who has a proven track record in completing corporate finance deals over a number of years. From day one Hart Shaw had a positive effect, starting with their interaction with the Vendor’s advisers and their help and advice in structuring the deal. The team were on hand to facilitate the progression of the deal through to completion.”

From Hart Shaw’s perspective, the awards capped off a busy few months for the Corporate Finance team, with new Corporate Finance Partner, Patrick Abel joining the firm in November 2014 and completing a hat-trick of deals in early 2015.

In addition to the £5m + Deal of the Year award, Hart Shaw were also shortlisted for the Mid-market Deal of the Year (sub £5m) for representing the The Floow Ltd, who received significant investment from Direct Line and the Corporate Finance Advisory Firm of the Year.

Individually, Hart Shaw’s Corporate Finance Executive, Joshua Greveson was shortlisted for the Emerging Dealmakers of the Year awards, with Corporate Finance Partner, Patrick Abel shortlisted for the Dealmaker of the Year award.

“Patrick Abel comments: “It has been a hectic few months since I joined Hart Shaw with the deal markets picking up to levels not seen since before the recession.

“Receiving this award is a great accolade for Purex International who are continuing to grow their business and invest into new markets. We are proud to have played a key role in helping them to achieve their objectives.”

For more information about Hart Shaw’s Corporate Finance services please contact Patrick Abel on 0114 251 8850 or patrick.abel@hartshaw.co.uk.

 

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Management Buy-In helps drive Excel Components forward

A management buy-in at automotive component supplier, Excel Components Ltd will allow the West Yorkshire based business to implement new product lines and accelerate growth over the next few years.

MBI at Excel Components led by Hart Shaw Corporate Finance, Taylor & Emmet Solicitors and funded by ABN AMRO Commercial Finance

The deal, led by South Yorkshire based advisers Hart Shaw Corporate Finance and Taylor & Emmet Solicitors, and funded by ABN AMRO Commercial Finance has allowed new Directors Martin Butterworth and Adrian Lamb to buy into the business and bring their extensive expertise to expand into new complementary markets.

Excel Components currently has a turnover of £2.6m, which is expected to double within the next three years as a result of the deal.

Managing Director of Excel Components Ltd, Martin Butterworth comments: “Whilst the deal had some complications, over a period of 6-months, we were happy to get past the line and acquire an established business in the UK Automotive aftermarket.

“Excel Components is the ideal platform for Adrian and me to further grow the business – especially with our contacts. We have many friends in our sector following over a combined 50-years in the industry and look forward to renewing these acquaintances.

“In respect of Hart Shaw and Taylor & Emmet, I can only wax lyrical about the excellent support and guidance, in particular from Patrick Abel and Joshua Greveson (Hart Shaw). Peter Crawford and Lisa Wallis from Taylor & Emmet solicitors came highly recommended and we were impressed with their hard work and professionalism.

“Both Adrian and I can now concentrate on our ‘day jobs’ and are full of optimism for a bright future with Excel Components. The brand is still relatively young but has a growing reputation as an affordable quality name, however, the hard work starts here and now.

“A heartfelt thank you to all for the invaluable expertise.”

Patrick Abel, Corporate Finance Partner at Hart Shaw said: “We are delighted to have worked with Martin and Adrian to conclude this deal. Management buy-in’s are difficult to fund in the current financial environment, however the knowledge and experience of the management team coupled with Excel Components strong position in the sector made the deal possible.  We were able to introduce ABN AMRO Commercial Finance to provide funding to make the deal happen and to meet the requirements for growth and diversification.

“This is a particularly pleasing deal for Hart Shaw Corporate Finance as this represents a hat-trick of deals for the department in 2015.”

Peter Crawford, Partner at Taylor & Emmet adds: “Having advised Martin and Adrian throughout the transaction process, it is clear that the strength of their industry background, combined with Excel Components’ brand will allow them to drive this business forward and achieve great success over the coming years.”

James Elliott of ABN AMRO Commercial Finance concludes: “I and ABN AMRO were delighted to support and fund this transaction. Adrian and Martin have significant experience within the sector and have ambitious plans to develop what is already a well respected and successful business.

“ABN AMRO were able to put together a funding package which ensured the deal could happen but also allowed flexibility for the forecasted future growth of the business. It was also a pleasure to once again work with Patrick and Peter who showed great patience and determination to overcome some last minute challenges to ensure the deal completed in a timely fashion.”

 

 

 

 

 

 

Patrick Abel, Corporate Finance Partner

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Team expansion for Hart Shaw Corporate Finance

Hart Shaw has expanded its Corporate Finance team to enable the department to deal with an increased portfolio of work in 2015.

Joshua Greveson has joined as Corporate Finance Executive and will be focusing on delivering the departments strategic services to clients.

Joshua Greveson, Corporate Finance Executive and Patrick Abel, Corporate Finance Partner of Hart Shaw

Patrick Abel, Corporate Finance Partner comments: “This year we have seen an increase in activity for business disposals and acquisitions, and for companies looking for additional funding to achieve their long term goals. The MBI and MBO markets are also becoming more active which is creating new levels of demand not seen in recent years.

“Joshua brings some much needed support to the department as we look to grow our added value services to our current client base and beyond.”

Joshua is a recent University graduate with a BA Honours degree in Business & Finance and has previous experience working with a national firm of accountants in the region.

Joshua adds: “I am delighted to be given this opportunity to work for such a highly regarded firm as Hart Shaw. I have joined at a really exciting and positive time with business confidence increasing and more transactions underway. We are in a great position to identify new opportunities to help contribute to the long term success of our clients.”

 

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Workplace transformation seminar – Thursday 19th February

Each year brings fresh challenges that demand a more competitive, responsive environment in which to operate your organisation. For business leaders, this begs the

Workplace transformation seminar on 19th February 2015

question “how do you stay ahead of the game?”

To provide answers, Dale Office Interiors invites you to their #flatpackevents seminars, which will equip and inspire you to meet the workplace challenges.

The first of their 2015 events, Workplace Transformation explores five reasons why smart businesses are becoming ‘2020 ready’ in 2015.

This event is a unique opportunity to join peers, contemporaries and thought leaders to discuss how they are designing and managing change in their workplaces.

Hear from:

• John Blackwell, Quora – an award-winning author and thought leader on the changing nature of work
• Patrick Abel, Hart Shaw Chartered Accountants, corporate financier
• Darren Smithson, Inform Group, business author & consultant
• Mark Haynes, Dale Office Interiors, workplace consultant

This is a must-attend seminar for all concerned with changing workplaces and work practices. It will encourage smart thinking about your corporate property strategies, talent acquisition alignment and the future of work.

All who register will receive a free research report (value £200) that provides evidence-based recommendations on the topics we’ll be exploring.

This event is in Sheffield from 4pm to 6:30pm on Thursday 19th February 2015. Booking is first come, first served. Do reserve your place today.

Register to attend via Eventbrite here.

 

View Hart Shaw’s other forthcoming events here 

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Positive signs for South Yorkshire economy

2014 was a reasonably active year for deals locally with local listed companies SIG plc and Pressure Technologies plc both making several acquisitions. SIG made four acquisitions: Trimform Products Ltd, a rainwater management business; Inatherm BV, a Dutch heating and air-conditioning business; Sodimat SAS, a French distributor of flat roofing products and Avonside Roofing They were also in sales mode, selling Miller Pattison to Help-Link, the boiler installation business backed by North Edge Private Equity.  Pressure Technologies acquired Rotherham based Roota Engineering and Quadscot Holdings.

One noticeable aspect of 2014 was the number of acquisitions by “turnaround funds” such as the acquisition of Keepmoat, the social housing group, by TDR / Sun Capital, Bridon, the wire rope business, by the Ontario Teacher Pension Plan and Davy Markham, the heavy engineering business, by Hughes Armstrong.

There are still plenty of businesses out there which are struggling to service the debt they took on pre-recession and whist fundamentally good businesses they need to restructure their balance sheets.  As a result there are a range of new funds directly targeting these businesses to put in place either debt or equity solutions to help these businesses stabilise and grow.  This is a trend I can see continuing throughout 2015 and beyond.

By far and away the biggest deal locally was the £1.9 billion acquisition of Firth Rixson by Alcoa Inc. the USA based lightweight metals technology business.  The acquisition strengthens Alcoa’s position in the growing aerospace market.  Alcoa are anticipating significant growth for Firth Rixson over the next 5 years and therefore hopefully this will have a positive impact on the aerospace supply chain locally and further boost engineering opportunities.

International groups are continuing to target specialist UK businesses particularly those allied to aerospace.  Plc’s have significant funds available and therefore are also looking to make acquisitions both at home and abroad.  We are increasingly dealing with buyers from the USA and India who are looking at Sheffield City Region based businesses across a broad range of sectors.

The management buy-out market is now beginning to gain some traction with more liquidity coming into the market from private equity, increasing availability of debt from banks and Asset Based Lenders, partially aided by government intervention such as the Enterprise Finance Guarantee Scheme which offers security to banks of up to 75% of the loan balance.  In addition, other funds such as Finance Yorkshire, UK Steel Enterprise and Finance For Enterprise are also providing funding for buy-outs and development capital.

We have had a very busy start to 2015 with several transactions closing in the first quarter and a very strong pipeline of deals including several management buy-outs as well as working with acquisitive clients so it looks like this could be the best year since 2007 all being well.

Patrick Abel, Corporate Finance Partner

T: 0114 251 8850, Email: patrick.abel@hartshaw.co.uk

 

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Secondary buy-out for specialist engineering business

Advisers Hart Shaw and ABN AMRO Commercial Finance have completed a secondary buy-out for a local specialist manufacturer of engineered products.

The deal sees the major shareholder of the business complete the buy-out of private equity investors from a previous management buyout of the company.

The deal structure saw a combination of Invoice Finance and term loan provided to meet the consideration and provide ongoing working capital, overseen by James Elliott of ABN AMRO Commercial Finance.

Hart Shaw acted as lead adviser for the transaction, with Corporate Finance Partner Patrick Abel negotiating and project managing the deal.

Patrick Abel, Corporate Finance Partner at Hart Shaw

Patrick Abel of Hart Shaw comments: “It is very gratifying to work with ABN AMRO on this deal, with James Elliott stepping in at short notice to work to a very tight deadline. The structure for the funding is exactly what we required and helped push the deal through within the timescales required.

“This deal gives the business owner more control and is a fantastic success story after the initial management buy-out in 2008.”

James Elliott of ABN AMRO Commercial Finance

James Elliott of ABN AMRO adds: “ABN AMRO were delighted to work with Hart Shaw in supporting this transaction and ensuring it completed within the desired timescales. The process was extremely well managed by Patrick Abel, ensuring the various parties were all available over a busy Christmas period so that the deal could complete early in January.

This is a well established business with an excellent reputation and strong management team. The new structure should enable them to go on to achieve even greater success.”

 

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The Adviser – Summer 2013

Welcome to the Summer 2013 edition of The Adviser, Hart Shaw’s periodic client newsletter. This newsletter aims to introduce you to the people behind the services at Hart Shaw and give you relevant points of contact for our more specialist services.

Our lead article focuses on preparing your business for sale or succession and the importance of developing a long term plan in order to maximise business value.

We would like to introduce you to our new Business Recovery Partner, Emma Legdon, who was made a partner at Hart Shaw earlier in 2013 after being with the firm for 20 years. Emma’s article on the current state of the economy shows that the recession may not be as bad as feared and that there are positive signs on the business recovery front.

We also introduce our new VAT Adviser, Carla Davis who provides a very interesting article on the history of VAT now that it is in its 40^th year of taxation.

Hart Shaw’s Financial Planning department would like to inform company directors to a new tax efficient life insurance product which is now available.

We also have some important news for users of Sage 50 Accounts software.

Our guest article comes from Reynolds Trade Credit, a key business partner to Hart Shaw who discuss the credit insurance market and how this can help with risk management for businesses who are looking to grow in difficult times.

Finally, no newsletter is complete without a plug for our social media forums! If you would like to engage with Hart Shaw on a more regular basis please check out our Blog, LinkedIn, Twitter and Facebook feeds. There are some smart phone links on the front page which will direct you to these forums.

As ever, we really appreciate any feedback you can give us about this newsletter, our other communications and the services we provide so if you would like to get in touch please email us at adviser@hartshaw.co.uk.

Click here to download The Adviser

Positive signs for South Yorkshire economy

As we enter the second half of 2013 and the fifth year since the start of the banking crisis you could be forgiven for thinking it was Groundhog Day. There is still debate between government, banks and business about access to finance. The news-cycle continues to include reports of fresh banking problems, but behind all the rhetoric there does seem to be a glimmer of hope.

 

Our involvement with the Regional Growth Fund has given us access to companies who are willing to invest considerable sums in new opportunities. Whilst the RGF system does provide grant support, the commitment from these companies does highlight our view that the “recession” is very much multi-sided. There continues to be talk of zombie companies, but in general the discussions are quieter.

 

Banks continue to be cautious but there appears to be the feeling that they have got their act together and are now focusing on outward investing as opposed to internal restructuring. Manufacturing companies that have restructured and modernised are now benefiting from new opportunities in local and international markets.

 

Whilst there are strong indications that the South Yorkshire economy has weathered the storm there are some key issues facing the region. The continued debate over the High Speed rail link and its route through the region continues to create doubt and uncertainty, especially for those Companies that are in the firing line. The delay in the redevelopment of Sheffield City Centre, and the debate over whether Next and Ikea will locate in the region puts the region under the international micro-scope. These decisions, whilst not directly impacting on business do reflect on the regions ability to plan and invest for the long term look to attract prestigious businesses and their employees into the region.

 

Businesses in the region have an excellent reputation in international markets for innovation and quality but we have to ensure we have a 21^st Century infrastructure to support our international partners in their decision to select the region over our close competition.

 

Steve Bell, Head of Corporate Finance

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

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Exit ahead – tax planning for the owner managed business

This briefing will help you to consider key capital tax aspects of succession planning for your owner managed family business.

We look at the principal options of selling or gifting the business which requires consideration of two very valuable capital tax reliefs which, if due, reduce the overall capital taxation liabilities. The reliefs concerned are Entrepreneurs’ Relief for capital gain tax and Business Property Relief for inheritance tax.

Click here to download the briefing.

Please do get in touch if you would like to discuss you situation.

Steve Vickers, Tax Partner

T: 0114 251 8850

Email: steve.vickers@hartshaw.co.uk

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