| Restructuring
to achieve cost efficiencies, profitability and growth
Restructuring a business and its finance can come about
as a result of a shift in strategic direction or focus, changing
market conditions or a change in ownership and/or management.
As with any business transaction, the appropriate funding
mechanism is required to both meet and indeed, anticipate
these changes. Have a look at some samples of instances where
we assisted our clients facing this scenario.
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£1m Injection Moulding Company
£1m structured funding to support acquisition of
company in administration
Incorporated in 1982 and subject to a management
buyout in 2000, our client is primarily involved in the injection
moulding of plastic products. Based in the Midlands, resources
include 90 employees and 14 CNC machines (Computerised Numerical
Control) at a modern and well-organised factory. There are
a wide range of customers for production output, such as,
bottling companies, thread manufacturers, stamp makers and
window fabricators, with some specialist but simple products
attracting high margins and extreme customer loyalty. Our
client has grown turnover year on year through quality service
and product innovation.
Despite maintaining this growth trend and
profitability, our client was placed in administration in
2002. Together with the management team and the company’s
corporate advisors EFE was able to
identify that an inappropriate funding structure and a debt
repayment schedule exceeding cash-flow generation resulted
in the difficulties experienced. The new funding structure
allowed the management team to purchase the unencumbered assets
from the administrator and provide sufficient headroom to
support ongoing working capital requirements.
Let us help you unlock the potential of your business or investment
- contact
us today.
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£800k Printing Company
£800k refinancing to replace existing facility and assist
implementation of restructure and growth strategy
Incorporated in 1946, our client is in the
print business, specialising in high quality, fast turnaround
output. Including stationary, annual reports, corporate brochures
and brand identities, our client’s customer base has
historically been design and marketing agencies working for
blue chip organisations. Recently, this base has been expanded
to include a number of well known ‘end customers’.
Based on this expanding client base and a
steady growth rate, resulting in turnover of £4.9m in
2000, our client moved premises in 2001, investing in higher
tech machinery to both increase capacity and improve finishing
capability. Unfortunately, with a downturn in the design industry
in late 2001, the forecasted requirement for increased capacity
did not materialise. Faced with increased costs, without the
balancing increased sales performance, our client needed to
review their business plans.
To implement a robust sales restructure and
substantial cost saving plan, our client required a more flexible
invoice finance facility than was available from their existing
provider. As a result EFE worked with the management
team to deliver a funding agreement that would assist the
company develop a solid platform from which they could return
to a steady growth rate.
Let us help you unlock the potential of your business or
investment - contact
us today.
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£3m Specialist Fabric Manufacturer
£3m refinance to fund business recovery plan
Our client is a long established manufacturer of high quality
and highly specialist textiles. These include glass, silica
and carbon woven fabrics which are heat treated and/or chemically
coated, resulting in heat resistant, ballistic protective
or high tensile strength materials for the aerospace, defence
and automotive sectors.
Acquired by its current owners in 1994, our
client expanded rapidly through vertical integration, namely
the acquisition of a rubber compounds manufacturer, 60 percent
of whose business comes from the sale of high quality rubber
coated textiles, and diversification, involving extensive
investment in purpose built premises, plant and machinery
and resources to produce coated sheet fabrics.
Due to huge production issues, the coated
sheet products business has swallowed a huge amount of cash
from the other two strongly profitable businesses and corporate
restructuring is now required. In tandem with additional facilities
extended by their Bank, Jeremy
Smith, Director - Northern Region delivered a flexible
facility, including funding for a large portion of the debtor
base that is non-EU/US, thus providing valuable additional
headroom to implement their recovery strategy.
Let us help you unlock the potential of your business or
investment - contact
us today.
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N/D CID facility for Manpower
Business for the Railway Industry
Refinancing to support turnaround of manpower business
Initially launched as a sole trader in 1994,
our client was set up to supply safety related manpower to
the rail industry, on a sub contract basis. At the time of
inception, the safety aspect for trackside working in the
UK was very poor, allowing our client to develop and deliver
a unique, value added proposition by guaranteeing trained,
safety conscious personnel.
Following a number of successful years, our
client suffered a couple of unfortunate events and was placed
into administration in August 2003, on the back of preferential
creditor arrears that had been accumulated some 12 months
previously. Part of their difficulties were due to a significant
increase in their cost base in anticipation of winning and
starting on a number of contracts.
There have been considerable improvements
in the business following the administration, including a
reduction in staff numbers, a complete overhaul of the vehicle
financing and the implementation of a Company Voluntary Arrangement.
A number of high profile staff have been recruited and systems
have been improved, all of which will assist in turning the
business around.
With a clear plan in place to move the business
towards profitability and with further contracts committed
to by major clients such as Network Rail EFE developed
a robust funding package to both support the trading cycle
going forward and assist in clearing liabilities outstanding
to the preferential creditors.
Let us help you unlock the potential of your business or
investment - contact
us today.
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N/D CID facility for Norcot
Engineering
Funding to purchase engineering business out of administration
Richmond Metal Finishing Co (UK) Limited,
a subsidiary of Advanced Manufacturing Solutions of Ashton
under Lyne, near Stockport has been bought out of Administrative
Receivership, saving a significant number of jobs. The company,
which will now be known as Norcot Engineering, is one of the
UK’s leading manufacturers of aerospace and high technology
components.
Directors Tim Harrison and Malcolm Mitson
have led the deal which sees Enterprise Finance Europe, one
of the UK’s leading asset based lenders, provide acquisition
finance and ongoing funding.
Tim Harrison, director of Norcot Engineering
said he’s delighted that the acquisition has resulted
in jobs being saved. “We have a highly skilled and loyal
workforce and we’re looking forward to working with
them for the future success of the business. We are now entering
a period of stability and will be looking to achieve real
growth in the near future.”
Fellow director Malcolm Mitson added: “We
will be focusing on our core customers providing them with
‘right first time’ product on time, eventually
aiming to become their chosen service provider which will
be key to our growth. We’re already looking at some
innovative changes, including the supply of kits of parts
to point of use delivery, which will further enhance our customer
offering.”
Norcot is looking to achieve a £5.5
million turnover in its first year. The company which is based
on Hill Street in Ashton under Lyne will be moving its corporate
headquarters and head office facility to the town. The site
will also become Norcot’s Centre of Excellence for the
manufacture and treatment of aerospace and high technology
components.
Key customers include; BAE Systems, B/EAerospace
(based in County Down in Northern Ireland), Britax and the
Ministry of Defence.
Let us help you unlock the potential of your business or
investment - contact
us today.
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