Case study
Management buyout
A company director with a controlling interest in a highly successful 20 year old services company was seeking to retire and execute a buyout with 2 fellow directors. The business generates turnover greater than $30 million per annum. Current Bank loans to the business of just over $1.0 million were secured by mortgages over all directors’ homes and a charge over the company assets. Additional financing was required to payout the bank facilities, generate additional working capital for planned company expansion and fund the retiring director’s buyout of equity and entitlements in the business. The existing banker was reluctant to provide any additional funding.
Liberty’s solution was a debtor finance facility to convert 80% of the company’s $2 million trade debtors into working capital which paid out the bank, funded entitlements to the retiring director and provided additional working capital. The remaining director’s homes where released from securing the bank facilities and were refinanced to fund the buyout of the retiring director’s equity in the business.
*This case study is based on the experience of multiple customers. Details have been changed to protect their privacy.
