Case study: Advising a Client on the Acquistion of a Nursery

Our clients were looking to invest in the UK and contact us to assist them in defining their objectives, creating a criteria selecting a suitable candidate business and negotiating the deal.

 Transaction value range - £500,000 - £1,000,000

Alliotts corporate finance team assisted with the following:

• Met with investor to identify the key parameters for the acquisition – turnover, profit and geographic location
• Shortlisted childcare businesses within the agreed parameters and discussed with investor to get a short list
• Approached targets on behalf of the investor and also did an initial site visit at the shortlisted businesses together with the investor
• Once the target had been identified, assisted with the preparation of Heads of Terms
• Conducted financial due diligence on the target which included:

review of carer to child ratios

income received from grants and government funding,

private fees and what % it represented of overall fees

occupancy levels – historic and forecast

after school club and potential to increase revenue

review of most recent OFSTED report

review of accidents log

review of cash cycle and working capital requirements

reconciliation of bank receipts to income in the business

reconciliation of salary reports to payroll expense recorded in the business

review of accounts working paper files for the most recently completed accounts

• Review of accounts and tax warranties in the Asset Purchase Agreement

• Alliotts also assisted with the preparation of forecasts for the Business Visa application as required by the investor and liaised with the immigration lawyer as necessary.

The client concluded the deal successfully and the business continues to perform well. We have since assisted the client with the acquisition of two further nurseries to add to their growing portfolio.

If you would like to discuss your plans to acquire a business and how we can help please contact me for a conversation in confidence.