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Case Studies

Beresfords help employee buy their employer with only small amount of capital

I never thought it was worth even considering such a big purchase how would I even start to find the funds; how wrong could I be I now own a thriving business

Mrs S.W

The Background

Our client was looking to sell but had struggled to find a suitable buyer in their niche sector. After discussions with Partner Phillip Hindle an approach to within the Company was made, and this resulted in interest being shown by a member of the team.

The client couldn’t see how they would purchase the business from the limited resources they could raise for finance.

Problems faced

  • How to raise funds to purchase business for 400k
  • On going support
  • Who to approach for financial support
  • Structure of the buy out
  • Legal help and costs
  • Timing of sale
  • On going retention of staff
  • How to draw a line on Current contracts

The Solution

After some initial meetings, Partner Phillip Hindle constructed a deal that would involve obtaining finance to cover existing working capital and a deposit to the Business owners.

A new holding Company was formed and the old business was purchased utilising funds from within the old company to provide satisfaction of half the sale price leaving a deferred element payable over 5 years.

The old owners were able to extract their sale under entrepreneur’s relief and low tax cost and the new owner was able to fund the majority of the purchase without having to raise much cash.

Beresfords were also able to help with the legal services by referral to the Legal Service Guild and to structure the deal and retention of key staff and the Directors for the change over.

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