FRP team provide lender due diligence in a multi-million-pound acquisition deal for franchise operator

FRP’s Financial Advisory team support the expansion of franchise operator, by providing lender due diligence in a multi-million-pound deal

Background

Point is a franchise operator with multiple locations around the UK. With ambitions to expand to 100 stores by 2026, the company was looking to expand its customer base through the acquisition of a fellow franchise operator, supported by new bank debt.

Action

FRP were instructed by the company and lender to undertake a pre-lending review.  The FRP team reviewed the historical and forecasted trading performance, net assets and cashflows, of both Point and the proposed target, identifying any issues and key financial risks to provide further insight to the buyer and to allow the lender to make an informed decision.

Outcome

FRP’s review supported the lenders decision to offer Point a significant funding package, ultimately leading to the subsequent successful acquisition. The acquisition has enabled Point to extend its customer base through its expansion into London with nine new stores, taking them closer to their goal of 100 stores by 2026.