mergers & acquisitions 25
Acquisition in fuel distribution industry
An acquisition deal involving two leading fuel distributors on the south coast has been unveiled. WP Group, headquartered near Southampton, has taken over Upton Oil Company, which has depots in Poole, Dorchester, Ringwood and Brockenhurst, for an undisclosed sum.
The tie-up with fellow independent Upton Oil Company brings the new combined fleet of fuel tankers to over 40, along with 75 staff, covering a territory stretching from Dorset to Sussex and up to London.
David Fairchild, managing director of WP Group, which is the supplier and support provider to thousands of businesses and householders, stressed that Upton Oil Company’s customers will receive a seamless service from the new owner.
He said: “This acquisition is beneficial for both parties as it brings together a wealth of experience and knowledge from both sides.
“I have always respected Upton Oil Company’s customer loyalty and hope to further improve the service they receive by utilising WP Group’s extensive infrastructure across the south coast.
“The business will continue to trade under the long-established Upton Oil Company brand and will service the existing customer base, which will not notice any disruption to normal service.
“The WP team is confident this new acquisition will further enhance WP Group’s growing reputation as one the UK’s leading independent fuel and lubricant companies.“
Family-run Upton Oil Company, with 75 years’ experience, specialises in supplying a local, friendly service to heating oil users, the farming community and commercial customers. The firm also sells a wide range of lubricants and offers a tank replacement service. Sales and distribution staff are all situated at the head office in Upton, Poole.
WP Group, headquartered at Esso’s Fawley refinery on the Waterside, has a history dating back more than 50 years and continues to grow under the ownership of the Fairchild family.
Since rebranding in January 2011, WP Group continues to increase its presence across the south coast by offering a leading service in each of its markets: industrial, aviation, agricultural, heating, automotive, commercial, motorsport and marine.
1st Touch acquired by Aareon AG
Aareon AG, a wholly-owned subsidiary of Aareal Bank AG and the consultancy and IT systems house for the European property sector, has acquired Southampton-based 1st Touch, a developer of mobile systems for the social housing and public sectors.
The decision reflects Aareon’s belief in the significant opportunities presented by mobile technology in the property sector across Europe and as complementary to the Group’s other software investments in the sector.
Manfred Alflen, CEO of Aareon AG, said: “1st Touch is the recognised market leader for the supply of
mobile technology to the UK social housing and public sectors. With the rapid growth of demand for this kind of mobile solution across Europe, the opportunities are enormous. Together we aim to capitalise on these.
“Following the acquisition, 1st Touch will continue to provide mobile solutions across multiple back office and ERP Housing systems and will become an essential element of our technology strategy, in the UK and the rest of Europe. It is this independence which makes it such a good acquisition and with the backing that the Group can offer, we are confident 1st Touch will continue to grow significantly.“
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – SEPTEMBER 2012
Leveraging debt to facilitate acquisition
Many business owners may look at their debtor book and groan – and the team at Pulse Cashflow Finance frequently comes across this knee-jerk reaction in its dealings with businesses across the Solent area. But, as Tracey Bevis, its senior new business manager explains, it’s more productive to see the glass as being half full rather than half empty. Here, she tells us why.
The crucial thing to remember is that, in many cases, its debtor book is the single most valuable tangible asset a business has, particularly if it is reasonably well established and has managed to keep its borrowing at a modest level.
What may seem like a situation that’s bound to develop into a major headache for the business owner may, on the other hand, be viewed as a gift from heaven by a prospective purchaser.
Why? Because canny prospective purchasers know that it’s possible to reduce the immediate cash impact of a purchase by leveraging the assets in the debtor book and raising finance against them as part of a structured package to purchase a business. Further, any such deal might also involve an element of deferred payment, making it even more attractive to the prospective buyer.
In fact, invoice finance companies are usually willing to provide as much as 80% prepayment against debtors. Obviously, the target company would need to be able to demonstrate that it could service the additional level of debt, but if the sums work, then the financial structuring is straightforward.
There are acquisition-hungry buyers out there, many of whom base their acquisition strategy on these exact specifications, specifically targeting businesses with high-value debtors and low borrowings. Perhaps it is time to reposition your groaning debtor book as an asset for sale. The important thing, of course, is to get expert help from a specialist provider such as Pulse. Structuring acquisition finance based on the value of a target company’s debtor book is one
Tracey Bevis
of our key specialisms, working quickly and efficiently with the acquiring partners and introducing potential target companies to prospective buyers.
In some cases, provided we are satisfied with the quality of the target company’s sales ledger, we can get an offer on the table within 24 hours. So if you would like to find out more about leveraging the debt in your business, or structuring an acquisition based on debt, contact Pulse Cashflow Finance on the details below.
CASE STUDY
A minority group of shareholders were desperate to buy out their colleagues in an engineering company, but were struggling to find the £400,000 required for the purchase. Pulse Cashflow Finance stepped in and provided an invoice finance facility of £300,000 and helped the shareholders structure a deal that was acceptable to both sides, using this facility and making up the shortfall with a combination of cash and deferred payments.
Details: 0845-539-7003
enquiries@pulsecashflow.com
www.businessmag.co.uk
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