Beavis Morgan group company, BM Advisory, was recently approached to advise the Board of a start-up insurtech company on its strategic options given the financial pressures it had encountered. The company had previously secured venture capital funding of c£1 million but had begun to experience cashflow difficulties.
The options discussed with the Board included a refinancing of the Company securing additional investment within the existing corporate structure, a share sale of the company, and a business and assets sale via a pre-pack Administration. BM Advisory achieved a share sale of the company, securing an additional £1 million of investment for future growth. The purchaser identified also has complementary services and reach to add significant post sale value.
BM Advisory worked closely with the Board and planned a targeted marketing campaign to work within a time table restricted by the cash burn of the business. A data room containing financial and operational information was created, and key milestones were agreed. In the short period available, Bm Advisory secured thirteen expressions of interest from parties in the UK, US and Europe, all of whom were given access to the data room. A closing date was set and three offers to acquire the company were received. The team then worked alongside the Board to assess the merits of each offer and advise on the preferred option.
This case demonstrates the broad range of assistance that BM Advisory can offer, and shows that the earlier a business seeks help the more options are available. Had this client waited any longer before seeking professional assistance, it is highly unlikely that value would have been preserved to the extent it was.
If you or your clients are in a similar situation, we recommend seeking professional advice at the earliest possible opportunity to explore the options available.