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Case Studies, Urgent Funding

Saving a 30-year-old Manufacturing Business on the South Coast of England

Our client, a reputable manufacturer of quality PCB electronic components, had been experiencing financial difficulties due to their inherited cost structure and a highly geared MBO.  Despite a 30-year history, a peak of £8million turnover in 2012 and established Blue Chip customers, the business was only marginally profitable and often produced losses.

The company went through a CVA in 2013, which ring-fenced the debts, but needed additional working capital in order to move the business forward.  After options to raise funds internally and via the balance sheet failed, the directors approached B&Y.

We jumped into action to structure a solution that:

  • Enabled the directors and shareholders to acknowledge the steps needed to ensure long term survival and crucially solid future profits.
  • Constructed a pre-packaged administration with our insolvency partners.
  • Introduced the right investor who has injected £300,000 in new capital.
  • Worked with management to secure a new ABL facility to fund the ledger and core working capital requirement.
  • Worked with management to ensure that all key customers bought into the new structure and supported Newco.

From start to finish the process took just seven weeks. New capital is always the hardest element and we’re delighted to have produced not just the new equity but supportive investment partners who will continue to back the business as it grows.

Our client was delighted. Not only have B&Y been instrumental in saving a failing business, we have enabled them to have a significant share interest in Newco that is clear of historic debt, has the right cost case to ensure profitability and the correct level of equity capital for growth.

a note from the client…

We are so pleased to have been referred to Beer & Young.  They have supported us completely and delivered on everything we wanted to achieve. Many advisory firms claim to be able to raise capital but actually are unable to go beyond Invoice Discounting and other lending options. Beer & Young clearly do have an active network of investors who put money into turnaround situations.  Thank you to everyone at Beer & Young who helped us through this process. This is exactly what we needed to move our company forward.

Director
Electronic Manufacturer
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