Background

Must Have Limited (trading as VIP Electronic Cigarette) is the UK’s leading e-cigarette retailer, with a network of over 100 retail units. Despite profitable trading at Must Have, financial pressures at its U.S. parent company, Electronic Cigarettes International, led to the appointment of FRP as administrator to Must Have following the receipt of a demand from HMRC.

An offer was submitted for the business by the management team but, having assessed the prospects of the business, the administrators decided to continue trading the business while our Corporate Finance team sought a buyer, believing that a greater value could be obtained for the creditors than the offer received.

Action

Adopting an integrated approach involving teams from both our Corporate Finance and Restructuring Advisory departments across our offices in London and Manchester, a marketing process was launched to find a buyer for the business as a going concern. This process was carried out under an accelerated timetable, while the business continued to trade in administration.

Drawing on our extensive network of potential trade and private equity buyers, as well as carrying out proprietary research to identify other potential buyers, FRP was able to run a quick and highly competitive process leading to offers from multiple parties.

The integrated, flexible approach ensured all stakeholders were kept informed, and any challenges quickly resolved. We also worked with key management to improve the exit value by trading the business profitably in administration.

Outcome

The business was sold for £11.9 million to Nicoventures Retail (UK), a subsidiary of British American Tobacco plc, preserving 265 jobs. The sale price represented a significant increase over the initial offer for the business, with the sale process being completed less than six weeks from commencement.