Case Study Two
A textile manufacturing company was offered for sale by its parent as it no longer had a “fit” with the rest of the operating business. The existing managers wanted to purchase the business under a Management Buy Out “MBO” but had little funds of their own and asked ECS to assist.
The purchase price of the business was £1.5Million which included the order book, assets, staff and preferential lease terms for the premises used by the company. The debtor book stood at a little under £1.0M with the working assets valued at £220k. The directors had a maximum investment of £50k available.
By negotiating a bespoke package with one of our Premier Panel funders we were able to provide £1.0M on a confidential invoice discounting scheme, with an additional £200k being provided by the same discounter against the working assets, which after the directors’ investment left a shortfall of £250k. The client had a firm order book of £390k which was due to be delivered within 12 weeks. We used a specialist trade financier to provide the additional capital required by securing the £250k debt against the order book of the business.