Begbies Traynor acquires insolvency consultancy CVR Global

Begbies Traynor has acquired CVR Global for a reported potential consideration of £20.8 million. The news sees Begbies Traynor strengthen its core speciality amid a spike in demand for restructuring services.

With the UK economy now looking likely to enter a double-dip recession due to the coronavirus pandemic, something which will see the restructuring industry extend its boom from last year deep into 2021. As a result, one of the few things investors can be truly confident of spending on at present is consulting firms which specialise in insolvency and corporate recovery.

An independent firm of insolvency practitioners, forensic accountants and experts in other related disciplines, CVR Global boasts around 30 partners and professionals. The firm operates from seven UK offices in London, Birmingham, Bristol, Southampton, Hove, Medway and Colchester; together with offshore offices in Gibraltar, Jersey, Cyprus and the British Virgin Islands.

CVR specialises in restructuring, financial distress, fraud and asset recovery, business disputes, and pension covenant reviews. It reported annual revenue of £9.5 million in the financial year which ended 31 March 2020 – and is likely to see that grow substantially in the future, something which has attracted the attention of Begbies Traynor Group.

Begbies Traynor also specialises in business recovery, financial advisory and property services, as it looks to build its complimentary capacities for financial distress, asset recovery, and many other lines of work. The deal takes place for a maximum potential consideration of £20.8 million on a cash free and debt free basis – and represents the largest insolvency acquisition the group has undertaken to date.

Mark Fry, Head of business recovery and advisory of Begbies Traynor, commented, “The acquisition of CVR significantly increases the scale and specialisms of our business recovery and financial advisory business across London and the South of England, whilst enhancing our overseas capabilities. The CVR team has a similar style and culture to our own and will be a highly complementary fit with our business.”

This represents a notable change of tack from Begbies Traynor, with the firm having sought to diversify its offering via acquisitions in recent years. The firm’s revenue boomed from £52.4 million to £60.1 million in 2019, buoyed largely by a diversification campaign that included organic investment, and the acquisition of Springboard Corporate Finance. However, as with the broader consulting industry, the firm did anticipate some disruption in the new financial year resulting from the Covid-19 lock-down – consolidating on its core strengths in response.

Ric Traynor, Executive Chairman of Begbies Traynor, added, “The increase in scale and capabilities leaves the group well-positioned to increase its market share and continue to grow its business recovery and financial advisory revenues.”

Looking ahead, he said, “We continue to consider further acquisition opportunities and organic investments in both of its divisions, in line with our stated strategy.”