Client: Specialist care provider
Facility: £980,000 acquisition finance
Purpose: Purchase of a care provider in the North West
Background: A fast-growing care provider looking to expand
Our client is an East Midlands-based care provider offering residential care, supported living, domiciliary care and respite services. Launched in 2020, the business has a turnover of around £5.5 million.
With plans to grow the business, our client identified a care provider in the North West that offers very similar services and has a turnover of around £2 million. Acquiring this established business with a compatible service offering would give them a presence in a new region and a strong platform for further growth.
The financing challenge: A deal that had already been declined
By the time our client came to us, the acquisition had already hit difficulties.
Our client’s previous broker had submitted several applications, all unsuccessful. A low-quality write-up that failed to reflect the business’s strength or long-term prospects, together with a lack of established lender relationships to fall back on, scuppered those applications and blighted future approaches.
The deal needed to be presented in a way that persuaded the lender to take a proper look.
Solution: Presenting the deal the ASC way
Working closely with our client’s accountant, we reworked the application to suit high street lending appetite. We emphasised the strength of the existing business and how the acquisition fitted the wider strategy and long-term objectives.
Using our lender relationships, we found a lender willing to consider the deal.
The outcome: Acquisition complete, with more to come
The application passed credit with a high street lender, and our client received the £980,000 required to complete the acquisition. The final package combined cash, the government-backed Growth Guarantee Scheme and freehold security, with no deferred payment.
The next step is to help our client refinance the expensive debt arranged by the previous broker with high-cost lenders, which was used to fund the cash deposit. Refinancing will improve the business’s cash flow as it continues to grow and enable future acquisition opportunities.
