The directors had been considering strategic exit options to provide a return to shareholders, and strong interest had been received from two major players. The company continued to receive funding from its secured lender during the course of the strategic exit process.
A non-binding offer of £2.3 million had been received from Lastminute Group to purchase the business, which would have seen a solvent solution.
However, after the due diligence process had been completed, the offer was reduced to £1 million. No other acceptable offers were available, and the directors then sought the advice of FRP on how to proceed.
We were initially engaged in an advisory role to give ongoing advice to the board on the strategic exit process. When Lastminute Group reduced its offer, FRP was appointed to take steps to place the company into administration and run an accelerated sales process, and to consider the reduced offer from Lastminute Group.
Agents were instructed to prepare a desktop valuation of the business to assess whether the offer received from Lastminute Group was in excess of the valuation on a going concern basis. We also carried out a detailed review of the marketing process that had been run during the strategic exit process.
The valuation, together with the marketing that had been undertaken, suggested that the offer from Lastminute Group was the best in the circumstances, and represented a substantially increased return to the secured creditor than if the company had been placed into liquidation. Solicitors were instructed and the deal with Lastminute Group was negotiated and completed, ensuring continuity of the business.
The sale of the business represented a 100% uplift on the going concern valuation prepared by the agents. This led to a substantially enhanced realisation for both of the secured creditors, one of whom was repaid in full.
Additionally, the senior management team of the company was able to negotiate incentive plans with the purchaser moving forwards. There was also a small return to unsecured creditors that would not otherwise have been achieved.
The sale of the business represented a 100% uplift on the going concern valuation prepared by the agents