BDO advises Profile Consultancy on its disposal to Bellrock

05 June 2017 Consultancy.uk

Consultancy firm BDO advised Profile Consultancy, as the Yorkshire-based real estate professional services group was acquired by Bellrock.

Based in North England, accounting and building consultancy Profile was founded in 1987, since growing to manage around £250 million in annual service charges for the retail and leisure sector. The company employs around 33 staff across its offices in Bradford and York.

Plans to acquire Profile Consultancy were initially announced by facilities management firm Bellrock, with financial backing from Lyceum Capital, after which advisory services for Profile Consultancy were provided by accounting and advisory service BDO. Shakespeare Martineau meanwhile provided legal counsel for the deal to the company as they weighed up their disposal to Bellrock. The value of the deal has not been disclosed.

Bellrock acquires Profile Consultancy

Commenting on the transaction, Satvir Bungar, BDO’s M&A Managing Director and Head of Facilities Management, said, “The management team at Profile has developed a unique proposition in a competitive service charge marketplace. There is real commercial synergy between the two organisations and Profile’s activities significantly complements the other, with Profile’s clients benefiting from Bellrock’s technical innovations, geographical reach of its new colleagues and access to additional resources. Bellrock is moving at a fast pace, expanding organically and through targeted acquisitions, and this significant investment is yet another great deal for Bellrock.”

According to BDO, the deal reflects a strategic importance of technology in the facilities management space. For Bellrock itself, the deal is the latest in a long series, having picked up five other acquisitions recently including Concerto, who operated in a similar space in the national market. The addition of Profile Consultancy is the largest deal in Bellrock’s recent spree, and firmly consolidates the firm’s presence within the market of tenant service charge needs.

David Smith, Bellrock’s Chief Executive Officer, said of the acquisition, “Profile is a highly skilled professionally led property advisory business that will add to our capabilities in supporting all our client's estate ambitions.”

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8 tips for successfully buying or selling a distressed business

18 April 2019 Consultancy.uk

Embarking on the sale of a business is one of the most challenging experiences a management team can undertake. Even serial dealmakers acknowledge that the transaction process can be gruelling, exposing management to a level of scrutiny and challenge through due diligence that can be distinctly uncomfortable.

So, to embark on a sale process when a business is in distress is twice as challenging. While management is urgently trying to keep the business afloat, they are simultaneously required to prepare it for scrutiny by potential acquirers. Tim Wainwright, an experienced Transactions Partner with Eight Advisory, says that this dual requirement means sellers of distressed businesses must focus on presenting their business in a way that supports buyers in identifying value, whilst simultaneously being open about the causes of distress. 

According to Wainwright, sellers of distressed businesses should focus on eight key aspects to ensure they are as well prepared as possible:

  • Cash: In a distressed situation cash truly is king. Accurate forecasting and day-by-day cash balances are often required to ensure any buyer is confident that scarce cash reserves are under proper control. 
  • Equity story and turnaround plan: Any buyer is going to want to understand the proposed turnaround strategy: how is the business going to enact its recovery and what value can be created that means the distressed business is worth saving? Clear presentation of this strategy is essential.
  • The business model: Clear demonstration of how the business model generates cash is required, with analysis that shows how financial performance will respond to key changes – whether these are positive improvements (e.g., increases in revenue) or emerging risks that further damage the business.  Demonstrating the business is resilient enough to cope with these changes can go a long way to assuring investors there is a viable future.
  • Management team: As outlined above, this is a challenging process. The management team are in it together and need to be consistent in presenting the turnaround. Above all, the team needs to be open about the underlying causes that resulted in the distressed situation arising.  A defensive management team who fail to acknowledge root causes of distress are unlikely to resolve the situation.

8 tips for successfully buying or selling a distressed business

  • Financing: More than in any traditional transaction, distressed businesses need to understand the impact on working capital. The distressed situation frequently results in costs rising as credit insurance becomes more difficult to obtain or as customers and suppliers reduce credit. Understanding how these unwind will be important to the potential investors.
  • Employees: Any restructuring programme can be difficult for employees. Maintaining open communications and respecting the need for consultation is the basic requirement. In successful turnarounds, employees are often deeply engaged in designing and developing solutions. Demonstrating a supportive, flexible employee base can often support the sale process.
  • Structuring: Understanding how to structure the business for the proposed acquisition can add significant value. Where possible, asset sales may be preferred, enabling buyers to move forward with limited liabilities. However, impacts on customers, employees and other stakeholders need to be considered.
  • Off balance sheet assets: In the course of selling a distressed business, additional attention is often given to communicating the value of items that may not be fully valued in the financial statements. Brands, intellectual property and historic tax losses are all examples of items that may be of significant value to a purchaser. Highlighting these aspects can make an acquisition more appealing.

“These eight focus areas can help to sell a distressed business and are important in reaching a successful outcome, but it should be noted that it will remain a challenging process,” Wainwright explains. 

With recent studies indicating that the valuation of distressed business is trending north. With increased appetite from buyers who are accustomed to taking on these situations, it is likely that more distressed deals will be seen in the coming months. “Preparing management teams as best as possible for delivering these will be key to ensuring these businesses can pass on to new owners who can hopefully drive the restructuring required to see these succeed,” Wainwright added.