Unless you’re relatively au fait with the business world, many people have a murky understanding of what exactly Corporate Finance is and how such teams work.
Corporate Finance is, in fact, a catch-all heading under which business advisory services and project management belong, with key elements being Mergers and Acquisitions (M&A), Disposals, and Fundraising. But what exactly do each of these entail?
- M&As – rapid business growth for both public and private companies, leading to expansion of current markets, synergy, and efficiency.
- Focus placed on analysing capital budgeting and management, as well as gaining an understanding of the funding of operations.
- A valuation process, including assessment of Environmental, Social, and Governance (ESG) credentials.
- Potential M&A targets compiled and related pitches developed, with consideration of due diligence and various related taxes – including transaction tax.
- Sale of companies or parts of companies on behalf of corporate clients, entrepreneurs, and owner-managers.
- Overall aim is to optimise a company’s value for sale purposes.
- Provision of an exit strategy, succession planning, and company evaluation, with consideration of hidden taxes, private equity potential, and the best ways to resolve distressed situations for companies.
- Extensive use of network contacts for debt or equity fundraising at any stage of the business lifecycle – helping businesses with where to look for funding and how best to approach potential funders.
- Funding to make necessary changes to businesses – including bank lending, grants, asset finance, and investors.
- Raising finance for cashflow purposes, growth and development capital, accessing grants and soft loans, as well as development finance and asset finance.
- Writing comprehensive business plans, debt advice, and forecasting finances
Nottingham-based innovators, Prime Principle, became well-known amongst educational suppliers as a result of creating ground-breaking educational software, Classroom Monitor. The pupil progress-tracking software came to be trusted by almost 2000 schools in the UK following its initial inception, with 53,000 individual educators utilising its flexible, needs-based services.
Their success garnered significant attention from competitors in the sector. Consequently, after 15 years, the company was subject to an unsolicited acquisition approach from Juniper Education. Due to the educational software company’s business plan, management aims, and the value aspirations of shareholders, detailed and impartial consideration of all available options was required before a decision could be made.
Overcoming the Challenges
There comes a moment in the lifecycle of all businesses – whether in the early stages or later down the line – where an unexpected opportunity arises and interrupts the planned trajectory. In these situations, it can be difficult to be certain of what the best move to make would be – particularly if your business is showing potential in the market or you’re new and unfamiliar with the business world. This is where experienced business advisors come in handy.
To weigh up their options and decide whether merging or selling were feasible routes, Prime Principle engaged the multifaceted PKF SC Corporate Finance team. Their expertise and market knowledge were combined to provide commercially-viable, value-optimising solutions and help directors to decide how they wanted to progress.
Thankfully, Prime Principle were able to tap into PKF SC’s wealth of knowledge to structure a deal and negotiate an increase in value. The team also led discussions regarding working tax capital and surplus cash extraction – key metrics for shareholders – and provided tax advice to EMI option holders.
Management were keen for the deal’s progress not to hamper the running of the business, proceeding only on the basis that the deal would undergo an expedited process.
Prime Principle’s main shareholder subsequently accepted a full-time board-level role at Juniper Education as a result of the deal, demonstrating that selling doesn’t mean relinquishing your role in the business you helped to create.
“The team at Prime Principle have a wealth of experience in the sector and the acquisition will support us in our aim to continue developing software and services that save time for teachers, giving them the information they need to ensure their pupils achieve all they are truly capable of.”
Gavin Freed, chairman of Juniper Education
How PKF Smith Cooper can help you
The aim of every start-up is pretty much to grow and scale up, in terms of both clients and revenue – something that investors are also interested in. For entrepreneurs, this is something worth considering in the early stages of business development – would you be willing to merge or sell on if the offer is right? Could it be more beneficial to do so?
The Corporate Finance team at PKF Smith Cooper can help you decide which move would be the best to make for you and your business, regardless of what stage you’re at. They- will enter discussions to structure deals, utilise a range of data to make accurate projections and valuations, and negotiate on your behalf.
Experienced and dedicated, the PKF Smith Cooper team are able to unearth innovative, commercially viable solutions and optimise the value of your business.
To find out more and see how you can make the most of your business, get in touch today.