Case Study

FRP supports client in successful acquisition

FRP’s Corporate Finance team carry out financial and tax review of target business in successful client acquisition

Published: 13 May 2021

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Written by:

Dave Howes

Partner

Corporate Finance Norwich

Joanne Price

Director

Financial Advisory Norwich

Background

Formed in 2002, our client provides a full range of contract hire and fleet management solutions with over 5,000 vehicles. Based in the east of England, the business employs more than 125 people, with a revenue of £43 million. The company’s management identified a potential acquisition as part of its growth strategy. The target was a contract hire and sales business based in south-west England with a fleet of 160 vehicles and c£2 million revenue. The board required financial due diligence to be undertaken to support the acquisition.

Action

FRP’s Corporate Finance team carried out financial and tax due diligence on behalf of our client, including a detailed analysis of the target’s historic performance and working capital, and an on-site visit to verify the systems and processes used within the business. The team also undertook the necessary tax due diligence, reviewed the draft sales contract to ensure the key financial and tax issues were dealt with, and prepared a detailed report highlighting the main areas for the board to consider.

Outcome

We were able to reassure our client in relation to the financial results and assets of the target business, while also highlighting a number of issues which could impact the price.

The acquisition was successful, and has allowed our client to continue their growth and expansion, as well as to extend their services to new and existing customers from a new base in south-west England.