Asset Finance - case study: Food Sector

Background:
Our client, a commercial food manufacturer in the West of Scotland had the opportunity to grow their business by acquiring a competitor. This involved the purchase of assets, staff & contracts of the target company.

Problem and Opportunity
A purchase price of £450k was agreed for the target company. The client encountered problems raising the required funds due to a difficult trading performance in previous years. This hampered their ability to raise the required capital.

Solution
The fundamental issue was in structuring a proposal based on the economic synergies of the combined business. There were economies of scale, cost savings and increased market share which, when presented correctly, would show strong lending viability for the acquisition. A £450k funding package was arranged involving asset finance & factoring debt through key lenders. The acquisition went ahead and the expected performance improvements have materialised.

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