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Construction | Strategy & Growth, Financial Management

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This new-start construction business had enjoyed a successful beginning, but the joint shareholders wanted to go their separate ways...

Early stage construction business – buyout and financial management


Situation

This new start construction business had enjoyed a successful beginning and returned good profits. However, the joint shareholders’ working relationship broke down and they decided to go their separate ways. Playfair Partnerships were not representing the business at the time, but one of the shareholders approached us for help.

Action

Review the business value

Playfair Partnerships’ client was keen to continue the current business and there was subsequently an agreement to buy out the other shareholder at 50% of net asset value. However, being a contracting business with several unfinished contracts, this was complex and involved an assessment of potential final outcomes and accounting for such.

Devise the most appropriate sale agreement

Ordinarily, with cash in the business, this would be realised via the company buy-back of own shares and entrepreneurs’ relief. However, the business had been established for less than five years and hence a new holding company had to be created to achieve the desired result.

Changing financial advisors

Impressed that solutions had been found to achieve the desired deal and that the required accounting could be done accurately and quickly, the client changed advisors and Playfair Partnerships were appointed to represent the ongoing business and the sole shareholder.

Providing proactive advice and financial management

Being in a contracting business, it is necessary to have real-time information on contract performance to ensure there are no slips in profitability or cash requisition. We provide this whilst also advising on other commercial aspects of the business.

Outcome

The buyout for this construction business was achieved economically and in short time, and subsequently, the business continues to make good profits and generate cash, providing further growth and investment opportunities.

Testimonial

“Playfair Partnerships assisted in my business transition. They had the knowledge and experience to quickly provide simple well-thought-out solutions to a range of issues. Since then, they have continued to be very proactive with a seamless multi-tiered offering (giving the right level of experience and cost) and providing a full range of services and advice in an easy format”. – Managing Director and Shareholder

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Studio 103
Mill Studio Business Centre
Crane Mead, Ware
Herts SG12 9PY

01920 444230mail@playfairpartnerships.com

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