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Case Studies, Urgent Funding

Acoustic Manufacturer is Saved with £500,000 in New Capital

Trading since 1890, our client is a leading thermal and acoustic insulation product manufacturer – their customer list is a Who’s Who of white goods manufacturers and prestige car brands.

The company made several acquisitions in the 1990s to extend its scope but turnover levels had stagnated at £14m and the business was in need of restructuring to be competitive and profitable.

Having failed to raise cash eighteen months prior, the shareholders and management had recognized that outside help was needed. Their key lender, a major Asset Based Lender, referred the owners to B&Y. Essentially they sought a cash injection to rationalise current operations and to de-leverage the balance sheet in order to drive future profitability and growth.

It became apparent through the process that the existing shareholders wanted “out”, and that the real need was a new set of owners alongside a capital injection. We advised our client on the likely structuring, investment and valuation of the business.

We delivered four investor meetings with four weeks of engagement; two of these made serious offers of funding. One proposal clearly stood out and the formal offer was agreed by all parties. The existing shareholders were bought out and new capital has been invested in the business to deliver future growth. To date £500,000 of investors’ capital has been deployed with the likelihood that a further £500,000 will come in during the next 6-9 months.

The project transformed from a requirement for working capital to a complete turnaround solution, and there was a significant level of interest from our investors from day one. I am delighted that in the end we found the right new set of shareholders, who bring with them enormous expertise in driving growth and profitability.

Associate
Beer & Young
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