Corporate Finance
Transactions occur at every stage of a business, from start up, early stage finance, funding for growth and acquisitions, through to the final disposal of the business and possible management buy-outs.
Their successful completion is often critical to the success of the business itself and first class professional advice can be key to this process. Such advice can only be provided by a team with substantial deal experience.
The Corporate Finance team at Francis Clark was set up in 1995 and has since advised on hundreds of deals, to become one of the most experienced teams in the region. The annual Western Morning News Deals Review shows us as ‘the most active deal-maker” for the last six years running. Based on this success we have grown the team to be the largest in the region.
We combine the advantages of a dedicated Corporate Finance boutique, with access to a full range of support services. This includes taxation advice - a critical area in determining the success of any deal, where minimisation of the tax liabilities for all parties can make or break a deal. We offer proactive management of the deal, extensive experience of the problems or issues that can occur and innovative ways to solve them, as well as the creative use of finance arrangements.
At Francis Clark we offer all the strategic knowledge and experience of the ‘Big Four’ on a local basis.
For more information, please contact our Corporate Finance Team
Click the links below to find out more about our corporate finance services:
Management Buy Outs
Tax Support
Capital Gains Tax
Employees and shares
Acquisitions and Disposals
Creation of Business Plans
Raising Finance
Due Diligence
Reporting Accountants
Joint Ventures & Mergers
Business Valuation
Grant Advisory
For more information, please contact our Corporate Finance Team
Management Buy Outs
MBOs are usually only undertaken once by management teams and as such, the transaction is generally a new experience for the people involved. Therefore, many of the issues that will concern the MBO team are new.These can include how much money they will have to contribute, the giving of personal guarantees, the value of the company and issues in the event of something going wrong.
We can advise and help clients implement a seamless process and avoid some of the more regular pitfalls that can occur with a management buyout. Even more importantly, we provide a constant sounding board throughout the process, providing comfort in an unfamiliar world.
Tax Support
Historically the tax planning part of transactions has concentrated on minimising the shares of any sales consideration taken by the Government. This, of course, remains a key element of tax advice. However increasingly complex tax legislation means tax planning is now a fundamental part of any deal to avoid tax bills becoming due, even when cash is not actually being generated by the deal.
Capital Gains Tax
The mythical 10% tax rate has been in existence for some time and has survived one major change in tax legislation as the rate most vendors expect to pay. However, with the introduction of Entrepreneurs Relief in 2008, this 10% is limited to certain types of sales and to the first £1m per individual (not per disposal).
This is where we come in. At Francis Clark we can help you carefully structure your business ready for a sale and avoid many awkward pitfalls. In addition, we can often help when we act for the buyer to find better ways of structuring the purchase, to save the vendor tax and reduce the overall price to be paid.
Employees and shares
The Revenue has a very complex set of rules regarding shares issues to employees (as happens in all MBO’s and some acquisitions). These have been introduced over the years to tackle the avoidance schemes undertaken by “city brokers” and pick up any shares issued to employers at a discount and any restrictions of the shares being issued, including variations on common shareholders’ agreement provisions.
If the complexity of these rules wasn't enough, there has been a definite lack of specific advice on their application by HMRC. Complying with these rules from HMRC, whilst saving tax, is a difficult balancing act and one that, unlike many other smaller accountancy firms, we are experienced at handling.
We have one of the largest tax teams in the region and regularly deal with most of the problems arising from transactions. This means that we can provide an immediate response with the best advice to minimise tax liabilities, both now and into the future.
Acquisitions and Disposals
Acquisitions
Essentially there are two methods of expansion open to businesses: organic growth or acquisition. Generally, organic growth is less expensive in the short term but obviously takes far longer to achieve. Acquisition should be a faster method and is capable of taking the acquirer into markets they might otherwise be unable to penetrate. However, a majority of acquisitions regularly fail to meet their original ambitions, with the root causes sown during the deal process. Careful deal structuring and negotiation is required.
Our Corporate Finance department has a wealth of experience in this area, including searches to source targets, deal negotiations, tax structuring, due diligence and assistance with legal completion.
Disposals
Maximising the potential consideration from a sale of a business starts several years before any exit. Our Corporate Finance department can assist in grooming the business for sale by discussing your future ambitions, reviewing the business market and trends, identifying potential acquirers, advising on potential future valuation, reviewing the business operations and structures to suggest alterations to maximise likelihood, and value of any sale.
After this planning, when it comes time to exit, we can assist in preparing an information memorandum, identifying suitable acquirers, negotiating the deal, advising on valuation and assisting with legal completions.
With extensive contacts and knowledge of the marketplace, Francis Clark is best placed to help you achieve the outcome you are looking for or exit route to fund your potential retirement or next acquisition!
Creation of Business Plans
At the heart of all successful businesses, lies effective planning but the day-to-day pressures of running a business can mean forward planning becomes low priority.
A strategic action plan is essential during times of growth and our Corporate Finance department provides a range of services to address this problem. These services vary from brainstorming meetings with the directors and senior management, through to the formalisation of ideas generated into action plans and putting these plans into practice.
At Francis Clark we have helped prepare numerous plans for internal purposes as well as for banks, venture capitalist and other interested parties. We can provide pro-formas, example business plans and spreadsheet projection models, that will enable you to create financial projections that can be flexed to assess achievability and comfort levels.
Raising Finance
Raising finance is a process that most businesses will go through a number of times in their lifespan. Finance often needs to be raised when a business is starting up, growing rapidly, expanding, developing its activities or changing ownership.
Our Corporate Finance department is involved in raising finance in the majority of the transactions we undertake. This can include asset-backed finance (loans, factoring or invoice discounting, HP, leasing), unsecured finance (EFG, mezzanine finance, overdraft, cash flow lending), new equity (Business Angels, private individuals, venture capitalists), finance provided by the owners and grants.
Most businesses are familiar with the straightforward forms of debt such as overdrafts and loans. However it is still possible to borrow money secured by the future cashflow of the business, although much harder than it once was. It requires a different approach to fund raising, impacting on the business plan and projections, as well as the potential funder.
Francis Clark’s Corporate Finance department has a wealth of experience of assisting companies to raise finance for a wide variety of uses and from a range of sources. We add value by acting as an independent "sounding board" and contributing our experience gained with other successful businesses. In terms of cashflow funding and equity raising, we have been at the forefront of these recent developments and have helped some of the equity funders shape their overall process to tailor it more closely to their needs.
We have also undertaken a majority of the recent equity deals in the region. This means we have excellent contacts in the appropriate places, giving you the best chance of securing the funds you need. We have a number of private contacts who are looking to invest money in businesses, either as a pure investment or to become part of the management team.
Due Diligence
For us, the definition of due diligence is a simple one: the reporting to lenders/investors of what they have been told, is fair and that they have been told everything that matters.
The Francis Clark Corporate Finance department is one of the most experienced in the region. We have carried out numerous due diligence investigations on behalf of individuals, all of the main clearing banks and many venture capitalists and buyers. We provide a fast response with clear and creative reports put together by experienced staff. We also offer expert tax commentary and deal valuation assessment.
Our due diligence team has exceptional experience of business sectors, local business and economic trends. Our success has been highlighted by the number of deals where we have been brought in to undertake due diligence but ended up being involved with a number of other functions and also retaining the business as an ongoing Francis Clark client.
Reporting Accountants
Our partners have built up a wide range of experience in a variety of stock exchange driven reporting roles. This includes flotation on most markets, as well as de-listing from for example AIM (Alternative Investment Market). This work can also cross over into non listed work, such as unquoted PLC, which still has to obey certain rules. Examples of reporting roles undertaken include valuation of non-cash consideration, issue of prospectuses, working capital reviews and confirmation of fair value to a vendor board.
We are one of the few regional firms of accountants with both listed clients and specific experience of Stock Exchange reporting work.
Joint Ventures & Mergers
The creation of a combined business venture between two previously independent businesses, is a complex process fraught with difficulties and private agendas. The only way to achieve a successful conclusion to any merger or joint venture is for both parties to be clear at the outset what they expect from the end result.
These requirements then need to be revisited regularly to ensure that, whatever compromises are made to enact the merger or joint venture, the end result is acceptable to both parties.
The use of an experienced outside party can be critical to ensure that the joint venture or merger is not sidetracked by outside issues or personal agendas. Negotiating skills are obviously key to many of the deals our Corporate Finance department undertake. This experience allows us to facilitate the
creation of suitable ventures or give early advice if a deal is unlikely to be acceptable to all parties.
As with much of our Corporate Finance department's work, tax structuring can be vital to avoid unexpected bills or the creation of tax payments where no proceeds change hands.
Business Valuation
The valuation of a business is required in a wide variety of circumstances, including business acquisitions, mergers or joint ventures, business sale, litigation, exiting minority or majority shareholders, introduction of new shareholders and employee shareholding incentivisation.
Business valuation is often described as an art rather than a science. While valuation is difficult, there are rules, although these rules are imprecise and require a large amount of experience to apply. Many factors may influence the end result; business activities, economic climate, location, goodwill, management structure, tax considerations and even the purpose of the valuation.
We are experienced in all methods used in valuing a business and in a wide variety of industry sectors.
We track transactions and maintain an internal database of the various profit, turnover and asset ratios used in deals, at various points in time. This allows us to provide the best advice to both buyers and sellers on the value of their own or targeted businesses.
We recognise that providing a valuation is usually meeting only part of a client's needs, so our valuation expertise is often linked with other services, including corporate finance, forensic accounting or tax.
Grant Advisory
At Francis Clark we recognise the particular challenges facing businesses today in terms of accessing finance to fund their future plans, whether traditional bank funding or from providers of equity. One source that is often overlooked is the availability of grant funding. Grant funding, from a variety of providers, will often provide the missing link in terms of a company achieving its future plans.
Although historically grant funding has been used predominantly for future capital expenditure, it can be used as a source of funding for other expenditure such as marketing and research and development, and as part of the overall funding package of a traditional corporate finance deal.
In recognition of the increasing importance of grant funding, we have created a specialist team within Corporate Finance with many years’ experience of advising on most of the major successful grant applications in the South West. This team has worked on a wide range of grant applications across the whole business spectrum from start-ups, to local companies seeking to expand, to subsidiaries of multi-national businesses either creating or safeguarding employment but facing competition from other companies within the group. We have advised companies in a wide range of sectors.
Our role is to work with companies such as yours to develop the business plan and supporting information to ensure your grant application meets the grant scheme’s parameters, and to advise and support you throughout the grant application process.
In summary, we:
- Aim to maximise your chances of a successful grant application
- Manage your expectations by addressing the key issues at the start
- Assist with all aspects of the application process
- Provide hands on help and advice
In recent months our team has secured grant offers ranging from £100,000 to £1 million but has experience of securing individual grant offers in excess of £5 million.
For more information, please visit our specific Grant Advisory page where you can read interesting articles and case studies. Alternatively, please feel free to contact our Head of Grant Advisory.
For more information, please contact our Corporate Finance Team
