FDD by FRP Financial Advisory team facilitates acquisition of complimentary data consultancy business.
Case Study
FRP team provides due diligence to support £6m debt and equity investment in growing data consultancy group.
FRP’s Financial Advisory team supports £6m investment to grow and diversify consultancy group.
Background
Matrix is a consultancy specialising in scoping projects to address its clients’ data management requirements. Following a period of growth, Matrix sought additional debt and equity funding to support the acquisition of a complimentary business specialising in the delivery of data management projects (primarily CRM and ERP solutions).
Action
FRP were instructed by the group, an investor and the lender to undertake a pre-lend review. The FRP team reviewed the historical and forecast trading performance and cashflows of both Matrix and the proposed acquisition.
Following non-recurring items being identified in historical data, an assessment of normalised historical profitability was made to provide a baseline against which the forecast could be evaluated.
Key drivers of potential changes in underlying profitability and cashflow were then identified and assessed, and the forecast sensitised to illustrate the potential impact of these on headroom and covenant compliance.
Outcome
FRP’s review provided a clear assessment of forecast headroom and compliance with the lender’s proposed suite of covenants, providing the investor and lender with the visibility required to proceed. The acquisition enabled the Group to provide an end-to-end service solution for its clients and further its expansion in overseas markets.
Working collaboratively with management, the lender and the investor allowed us to identify and deliver a bespoke scope of work for Matrix that supported the transaction and met the requirements of the key stakeholders.
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