Re-financing can also be used in positive situations, such as Management Buy-outs (MBO), and Management Buy-ins (MBI).

If the existing management of the business wishes to buy out the existing shareholders, it is rare they will have the funds at their disposal. A refinancing of the businesses assets could raise funds to enable this to happen.

Some serial entrepreneurs who regularly buy businesses can use invoice and asset re-financing as a means of funding the purchase. Companies who look to buy out other businesses can either refinance their own assets, the bid target assets, or both, to raise the funds to make the purchase. Now Financial Partners has built up considerable expertise in this area, working with management teams and entrepreneurs to finance change of ownership within businesses. We were selected by the Institute of Chartered Accountants corporate finance faculty to speak recently at their turnaround roadshows on funding in difficult situations.

The following case study highlights how the process works in practice:

An invoice financier who had a long-term relationship with an underperforming printing business learned of a plan for a management buyout and whilst the calibre of the team was strong they did not possess the required funds. Now Financial Partners were introduced to perform a re-financing, which raised the majority of funds required for the buy-out, with the remainder paid by earn- out. Taking the overheads of the previous shareholders out of the business released sufficient cash to comfortably afford the new debt taken on. The business has subsequently prospered.

To find out more about how we can arrange funding for your MBO, MBI or acquisition, call us today on 0870 950 3828 or email info@nowfinancialpartners.co.uk