with the £450m of equity announced coming from money received in a £1.7bn warehouse sale and leaseback deal with investment giant Blackstone in 2021.


The GMB union has also returned to the fray. It has repeated its call for “proper scrutiny” of the acquisition by the Competition and Markets Authority (CMA). It says it remains concern about the “debt burden” and what impact it may have.


Nadine Houghton said: “We are concerned rising interest rates will leave the debt of the UK’s third largest retailer unsustainable.


Mohsin and Zuber Issa


Stuart Rose said: “Zuber and Mohsin Issa have spent the last two decades creating the best convenience retailing business in the UK.


“Their journey from one site to creating a global business has been extraordinary and reflects their vision, and ability to be a genuine disruptor in the forecourts market, turning these locations into destinations in their own right with food, coffee and convenience.


“Following this deal, they will remain in nine countries, with an even stronger business, which is able to focus on international growth.”


The announcement of the deal hasn’t been the end of the story for the media or industry watchers.


It was followed by reports that the takeover is being funded by the sale of Asda’s assets,


Expert View


EXTERNAL FUNDING: WEIGH UP ALL YOUR OPTIONS


By David Filmer, partner Forbes Solicitors


When looking at external sources of funding for your acquisitions, there are more options than ever before.


These include traditional bank finance, asset-based lending, private equity (PE), crowdfunding, and many others.


Asset-based lending involves lending money using the borrower’s assets as security. The amount the lender agrees to lend at any point in time depends on the value of specific assets that the borrower owns rather than the borrower’s cash flows. This includes physical assets such as debtors, stock, equipment, machinery and property.


An advantage is that it allows the company to fund growth projects that the company could not fund internally.


Organisations willing to finance your business can also provide useful expert advice. However, some sources of external financing require you to give up part of the ownership in exchange for the funding, for


example part of the finance agreement may be that the investor is allowed to vote on company decisions. It is important to consider the advantages and disadvantages before securing external funding.


Private equity firms operate investment funds on behalf of institutional and accredited investors. There is a wealth of options available now for private equity, with many firms looking to back promising companies with a solid management team and good prospects.


PE will usually work closely with the main stakeholders and bring in specialist expertise from within the sector to maximise the opportunities within the company and boost profitability quickly.


Crowdfunding is a way of raising money from several individuals to fund a business, project, venture, or cause. This is often done through online platforms to reach hundreds if not thousands of potential funders.


LANCASHIREBUSINES SV IEW.CO.UK


“More than 7,000 Asda colleagues are already facing fire and re-hire - this slashing of terms and conditions is just the tip of the iceberg.”


In its earlier letter to the minister the union spoke of Asda debts thought to be more than £4.7bn and a £7bn EG debt which is said was due to be refinanced in 2025.


West Lancashire Labour MP Ashley Dalton joined the fray, adding her voice to GMB calls for the business secretary and the CMA to look at the deal.


It would also appear that efforts are continuing to ease the Asda debt burden, with reports last month from America that a deal to sell off a large part of the business’ property empire to a US investor was in the offing. It spoke of a buyout of around 25 Asda stores on leases of up to 20 years.


Given all that activity, there is nothing to suggest the Issas will be able to step out of the limelight any time soon or that this is a story heading towards the checkout.


Steven Bell Corporate finance director


/PierceCA @pcaltd /piercecaltd


NAVIGATING THE PITFALLS OF


BUYING A BUSINESS


The acquisition of an established business should be the key to success, but buyers should approach a transaction with a healthy scepticism to ensure they don’t suffer unnecessary risks.


Inaccurate valuation Sellers are keen to secure the best price possible and often overstate the value of their business. Obtaining professional advice on value and deal structure will ensure that the business is bought for the market value.


Hidden liabilities and obligations Taking comprehensive, commercial legal advice can identify and mitigate potential risks such as pending lawsuits, tax, environmental, or contractual obligations which may not have been disclosed during negotiations.


Declining performance A prosperous business can quickly deteriorate due to changing market conditions. Considering the most recent performance, including work pipeline and prospects, will give an indication of sustainability when compared to the historical numbers.


Cultural and organisational integration Merging two distinct corporate cultures and managing the transition can be complex and disruptive to the workforce. Developing a well thought-out integration plan that addresses differences in culture will ensure a smooth transition for all stakeholders.


Financing and capital constraints The funding markets are dynamic with funders regularly changing investment criteria. Taking professional advice will ensure that you obtain the most appropriate funding structure for the transaction.


Customer and supplier relationships Developing a robust customer retention strategy and establish transparent lines of communication with clients and suppliers will help to address the risks where customers and suppliers have established loyalties to the previous owner.


Employing the knowledge of a corporate finance advisor, will increase your chances of a successful and rewarding venture.


Call us on 01254 688100 or visit pierce.co.uk


27


DEALMAKERS


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84