01 Mar 2021 10:00 AM

Our client approached us looking to assist with the acquisition of a hotel on the South East coast.

The transaction range value was £500,000 - £1,000,000

This was an inward investment client – they had already identified the target but approached us to undertake the due diligence and provide general advisory on the acquisition.

Our team of corporate finance specialists were involved from the very start of the project, from helping our client scope out their objectives, building a criteria for a suitable target through to due diligence and negotiating and finalising the deal. 

Our team included accountants and tax advisors, experienced in completing corporate finance transactions. 

Our support to our client included:

  • Advised on the pros and cons of asset purchase versus share purchase
  • Assisted with negotiation of deal price
  • Prepared a financial due diligence report on the target which included:
  • Review of accounts working paper files
  • Review of historic occupancy levels and events booking register
  • Staffing levels
  • Review of possible CAPEX required
  • Historic and forecast RevPAR and TRevPAR
  • Corporate bookings
  • VAT treatment for deposits
  • Review of VAT, PAYE and Corporation Tax records
  • Review of liabilities and identifying potential future liabilities
  • Review of expenditure
  • Review of income trends and the working capital cash cycle
  • Review of staff and expenses with a view of identify any benefits in kind, off payroll workers etc
  • Reliance on key individuals
  • Publicly posted reviews
  • Review of accounts and tax warranties and indemnities in the Share Purchase Agreement
  • Preparation of completion accounts

Following the successful outcome of this transaction our client has gone on to acquire a further seven hotels and we have recently assisted on the sale of one of their portfolio hotels. We continue to provide accounting and audit services to the company.

If you would like to discuss an acquisition please contact me for a conversation in confidence.