Corporate Finance: Newsletter

November was another incredibly busy month for the team.

We are pleased to announce that we have supported on multiple engagements with our clients including, but not limited to:

• Barric (electronic manufacturer) – Valuation project
• CSO Marine Group (shipbroking) – Valuation project
• PR Roast (wholesaler) – Valuation project
• Empower Development (insurance) – Support in relation to an EMI scheme
• Hygiene Contracts (water treatment) – Support in relation to an EMI scheme
• Sam 99P (discount retailer) – Valuation project
• Andromeda Technologies (investment company) – Valuation project

Our success was down in part to YOU and the referrals we receive. We are very grateful for the whopping 22 referrals we received during November with work ranging from valuations, sale mandates, MBOs, financial due-diligence, debt advisory and advice in relation to EOTs.

Despite this, we always have spare capacity and are eager for more referrals.

New Joiners

Adam Croft joined the department as Director of M&A. He is supported by 2 additional new joiners Tolulope Ajadi and Zain Karbani as we continue to grow our team. Additionally, Paul Spriggs has joined the M&A team from Clarkson Hyde.

M&A

In this very short space of time, the M&A team have met with 2 prospective clients and have a further 11 meetings scheduled in the new year as we seek to grow our department.

Team meetings

To ensure we keep everyone updated in terms of what we are doing as service line, we recently arranged Teams calls to go through in more detail about our offering and how to broach the subject of succession planning with clients. Should you have any further queries on the back of this, please don’t hesitate to get in touch.

Funding

Interest rates fell on November 7th to 4.75%.

When preparing accounts and collaborating with clients if we see interest rates on existing debt looks high, or the debt is not suitable for t he client in terms of there being cashflow issue, or not suitable for their growth plans or is up for renewal then let us know. If the interest clients are paying across the different types of facilities is greater than the following, please contact us to see if there is a better product for them.

• Invoice Finance loan – above 3% plus base
• Business loan – 9%+
• Commercial mortgages – 7%+
• Vehicle finance/Asset finance – This changes a lot dependent on the asset but anything above 7%

Succession/exit planning/Sale mandates

One of the key areas we would like to assist clients with is to discuss with them their plans for the future and how they intend to exit the business, whether that that is to sell the business, orchestrate a management buyout, or simply close the business down when they want to retire.
Ideally, we get the opportunity to speak to these clients as early on in their journey as possible to give them the right steer, so when you speak to clients whether as part of a pre year-end tax planning meeting, accounts finalisation meeting or a casual chat consider asking them at the opportune time what is their future strategy? If you are not sure about to approach this, please do not hesitate to reach out to the team.

Technical note

As discussed in our previous newsletter, we are aiming to provide some insight into some of the technical areas we are involved in and thought it would be good this month to share some knowledge in relation employee ownership trusts (EOTs).

EOTs are an increasingly popular form of succession planning by transferring the ownership of a company to its employees whilst providing significant tax benefits for both the company and the individuals who dispose of shares to the EOT. These tax benefits include exemptions from capital gains tax (CGT) on certain disposals of shares, relief from income tax on bonuses up to £3,600 per year per individual, and relief from inheritance tax (IHT) on certain transfers into and from EOTs. The John Lewis Partnership is the largest EOT within UK.

How we assist with the process is by undertaking a valuation of the company and work with the tax team to ensure the scheme is reported correctly to HMRC. One of the other key parts of establishing an EOT is communicating the process to the recipients of the structure to ensure it is fully understood.

If you would like to know more about EOT schemes, and how to approach these conversations with clients, please do not hesitate to speak to the team.