FRP Advisory

At the start of a new year, it’s a natural time for business owners across the South East to reflect on how far their companies have come in the past 12 months and to consider their ambitions for the future. It’s an opportunity to take a holistic view of plans and to think about a strategy that will ultimately get them where they want to be.

That can be difficult in a rapidly changing market like the one we are experiencing right now, so it’s always useful to get an expert eye to help identify the options available and to ask the right questions. Is this a good time to exit a business? If so, what route is best? Trade sale, management buyout, employee owner-ship trust, merger – or something else?

Perhaps to realise their business’ full value, owners will need to grow their companies further. If that’s the case, should they be looking to grow by acquisition or organically, and what funding do they need? While there is cash available from investors, there’s no doubt that fundraising is more challenging in the current environment.

Private equity investors, in particular, are monitoring firms’ performances more closely and for longer, conducting more detailed due diligence than they perhaps previously did before investing. That means that, for those seeking investment, preparation is key.


An important ally

Against this backdrop, a corporate finance adviser will be an important ally to ensure all the investor’s criteria are well understood and that a business is genuinely on track to meet those benchmarks.

At FRP Corporate Finance, we’ve continued to see interest from private equity investors, particularly in businesses with reliable recurring revenues. They are now also looking for the security that comes with long-term contracts, such as in the facilities management sector, even where there is a reliance on a relatively small number of customers, which they might have shied away from previously.


Overseas interest

When it comes to M&A activity, the main trend we have seen over the last few years is the large number of overseas buyers for relatively smaller companies compared to a few years ago, including owner-managed businesses. This is set to continue and opens up an additional pool of potential international buyers

We recently advised Eastbourne-based Go Plastic Pallets, a leading independent supplier of plastic pallets, on its sale to Dutch products and logistics services provider, Rotom Group. We negotiated the deal and project managed the transaction process, having previously provided advice to the shareholders with a view to their ultimate exit. I had personally worked with the team at Go Plastic Pallets for many years, providing strategic growth advice, so this was a particularly satisfying outcome.

International companies are interested in investing here, and see the UK as a strategic location to do business. It’s also hard to set up a business from scratch, especially if they’re trying to do so from another country. It can therefore be a much easier option to acquire an existing business that can give them a new platform for growth.

When I was a guest at the recent Sussex Business Awards, it was clear that the county’s business community has a defiantly optimistic and entrepreneurial outlook. At FRP, we’re embedded in that community and have a deep-seated experience working with local firms and helping them to achieve their full potential.

We have a depth and diversity of expertise through our Corporate Finance, Debt Advisory and Restructuring teams to support firms
at all stages of their evolution. When it’s time to take the next step, or simply assess your options, we’re here and happy to help.

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