Case Studies

Obtaining working capital and acquisition finance for a car body shop, then exit

Early days

An experienced body shop manager obtained backing to acquire a small body shop. He was able to increase the business’s turnover and profits but required assistance on bookkeeping, payroll and management accounts. Hands-on assistance was provided as well as assisting in obtaining working capital assistance from the bank.

First acquisition

A second body shop was acquired some six months after the first. Appropriate due diligence and assistance with the legal process was provided and, following the acquisition, the accounting and reporting processes were integrated with those of the first business.

Restructuring and strengthening of management

As part of the growth strategy, the two businesses were incorporated and placed under a new holding company. Two general managers with extensive experience of the industry were recruited and appointed to the boards of the two subsidiaries and were persuaded to invest in the group.

Specialist funding

As the business grew, cash flow became more of an issue. A significant level of business arose from insurance companies and other specialist work providers, who had varying and often lengthy payment terms. With a strong balance sheet and accurate and timely management accounts, it was decided to seek specialist debtor funding (confidential invoice discounting) from a provider who understood the industry. This brought in a significant level of new funding.

Second acquisition

With strengthened management and strong trading, the opportunity was taken to acquire a third body shop, which was significantly bigger than either of the other two. A full-time, qualified financial controller was recruited to oversee the finance function and team.

Disposal and exit

The group was sold to another, larger and national body shop group and, having grown from being a business advisor to being the part-time group finance director, it was appropriate at this time to exit the business.