Mazars advises on Hunters Property on London AIM IPO

31 July 2015 Consultancy.uk

Mazars has provided Hunters Property with accountancy and advisory services in its bid to go public through an IPO on London’s AIM exchange, where it entered with a market capitalisation of £16.9 million. The company is looking to expand to 500 branches in the coming years as it eats smaller companies, with the IPO a means of financing its expansion plans.

Hunters Property is an in 1992 established national sales and property management firm that has 153 branches across the UK, of which 142 are franchised. The company offers a range of services to clients, which include property maintenance, sales and transfers, invoicing and collection, process management, annual returns, budgeting, service charge collection, accounting and annual returns. The head office for the firm is in York, with regional offices in London and South East, Yorkshire and Humber, and South West, among others.

The IPO earlier this month saw the company enter with a market capitalisation of £16.9 million on admission, through the release of 28,149,919 ordinary shares at 60 pence apiece. The company was floated on the AIM, which is London’s Stock Exchange for smaller growing companies. The aim of the IPO is to generate capital to further its operations across the UK, with a stated plan of increasing its branches to 500 over the coming years through, among others, M&A.

Mazars advises on Hunters Property on IPO

The company was supported on its IPO by professional services firm Mazers, whose agents provided accountancy and advisory services. The deal sees the consulting firm continue in a role of support to the group following its appointment as auditor.

“This is an immensely exciting day for Hunters. Listing on AIM is a major step forward in our expansion plans: with access to further capital we see significant opportunity to increase our market penetration and strengthen our position as one of the UK’s favourite estate agency brands. I would like to thank Mazars for the invaluable expertise and support they have provided during the flotation process. We look forward to working with them going forward as our provider of audit and assurance services,” comments Ed Jones, CFO of Hunters Property.

Richard Metcalfe, Mazars’ UK Head of Capital Markets, adds: “We are delighted to support such a big name in UK property sector during this exciting period of development for the business. We wish them every success with their future growth strategy and are looking forward to working closely with them to provide auditing and assurance support.”

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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.