March 7, 2022
Success in a business is a little like completing a jigsaw. Hold the correct complement of requisite pieces and a vision grows complete in front of your eyes. Miss a part or two, though, and the picture remains stubbornly unclear. Ultimately, achievement in either comes from a joined-up approach.
And, in the present-day business world, where increasing numbers of acquisitions and disposals stand as a legacy to the impact COVID-19, accountancy and advisory firm Haines Watts is ensuring organisations are best placed to piece together their future blueprints. With a trusted team of experts combining industry knowledge with unrivalled understanding of funding streams and the North’s varying sectoral strengths, it is helping owner managers meet their targets.
Furthermore, in a rapidly changing landscape where operators – a good many of which rode the financial crisis of the late 2000s – are materially transforming their outlooks following the pandemic, Chris Hird, Haines Watts’ associate partner for corporate finance, says its services have arguably never been more important.
He says: “Businesses have had it tough during the pandemic and many have struggled to weather the storm. “But there are businesses that have thrived, and those with the stronger balance sheets are now in a position to expand. “As a result, we are seeing a lot of buy-and-build acquisitions taking place.” However, while the market may be evolving, Chris says the fundamentals of concluding a deal remain the same.
To make such ventures reality requires great due diligence, not least on a seller’s financial status, its market standing and scope for growth, and its fit within a prospective buyer’s operational structure.
A further – critical – aspect is cash. Accessing necessary funds, however, is far from straightforward and, says Chris, calls for a bespoke approach, which Haines Watts’ specialist team delivers by matching a deal’s unique nature with equally distinctive financing streams.
He says: “Typically, lenders will provide support to a certain level, leaving a business to source the rest of the capital. “Some use their own money, as well as loans, and others take steps to raise asset finance against a business or a debtor book.” Chris continues: “The high street banks are invariably lending only for what they consider low-risk arrangements, which acquisitions don’t always fit into. “So our focus is on matching what is present within an acquisition to funders across the board; it’s all about securing the right blend. “For example, the banks who have the most money may be the most risk-averse too, whereas further down the list, funders are less risk-averse but more expensive.
“There are EU pots of money that owner managers can tap into too, but they come with restrictions. “The Northern Powerhouse Investment Fund, for instance, has limitations; it doesn’t cover Newcastle, but does cover Teesside, and you can’t use it for acquisitions. “But if firms use the cash from the business for an acquisition, they can then potentially put some money in for working capital. “The whole funding process is very fluid and very innovative – it’s like putting a jigsaw together without a picture.”
And Chris says such insight is extremely important in a business world where no two deals are the same. “There is a quirk to every transaction,” he says. “If a business is an importer, for example, that represents a quirk because you might be able to finance its incoming stock. “That isn’t really the acquisition, but it’s an element of it, because if you free up cash from the existing business, it can be siphoned into the acquisition.”
And this individual approach is mirrored in Haines Watts’ service, with Chris and his team bestowing highly personalised support that provides clear, honest and well-informed advice. “We’re effectively a sounding board and a critical friend,” he says. “Clients often find themselves looking at multiple things, which can be challenging. “But they know they can come to the team and I and ask about anything. “There could be two deals on the table and the close nature of our relationships means we’re able to say, ‘I don’t think this one gives you anything strategically, but the other one puts you in a different market’. “Essentially, we remove the blinkers and go beyond a deal per se, exploring and highlighting its wider possibilities for clients.
“My team and I are accountants, we understand how business works, and that enables us to deliver an all- encompassing service.“It’s a relationship thing; we support a business with its accounts and tax, which helps it grow and get to a point where it wants to make an acquisition or, conversely, look at an exit strategy.
“And we are ideally placed to help with both of those situations because we are that sounding board and, in many cases, a kind of extension to a company’s management board because we know it so well.” Equally crucial, says Chris, is Haines Watts’ ability to advance any prospective deal without impacting on owner manager’s existing day-to-day operations.
He says: “The people we work with are under great pressure and the kind of relationship we provide really helps them manage that. “A lot of owner managers are very good at what they do, in terms of understanding a sector and running a business within it. “But very few have much experience of acquisitions, so they need a steer, and our support helps them retain their focus too. “With any acquisition, it can be very easy to look towards the target, and not so much on the present, but our guidance ensures they marry the two together. “And that, ultimately, sums up what we do.
“We provide an all-embracing approach that blends clients with the right deals and the right funding, which in turn provides them with the best opportunities to succeed.”