a bankers perspective – securing funding for growth
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A Bankers Perspective – securing funding for growth. Setting the Scene. Nursery Sector remains highly fragmented. 2014 has already seen large a number of transactions which have involved consolidation in the Sector. Most nursery businesses remained resilient in the economic downturn. - PowerPoint PPT PresentationTRANSCRIPT
Setting the Scene
• Nursery Sector remains highly fragmented.
• 2014 has already seen large a number of transactions which have involved consolidation in the Sector.
• Most nursery businesses remained resilient in the economic downturn.
• Sector is generally viewed positively by both investors and lenders.
• Positive economic outlook
Character of the existing business – internal analysis Management
• Track record
• Blend of skills/ succession planning.
Structure and systems
• Head office support or management on site?
• How is performance analysed internally?
• What skills are outsourced?
Culture
• Management style
• How satisfied are your employees?
• Good childcare above profit?
3 | Barclays presentation title | 30 January 2012
Character of the existing business – external analysisTrading activity
• Evidence that your business is reputable and sustainable.
Financial: Management accounts, audited accounts, KPI’s.
Operational: Ofsted reports.
Industry outlook/competitive positioning
• Historic impact of downturn.
• Government policy/support.
• Regulatory changes
• Existing supply in relevant areas.
• Fee rates/Ofsted ratings vs key competitors.
• Why would a parent choose your nursery?
4 | Barclays presentation title | 30 January 2012
Position the opportunity with your bank
Key areas to cover:
• Is it an acquisition, a new development, or an extension?
• How does this opportunity compliment your existing settings?
• Track record/reputation of target?
• Source of introduction to the opportunity?
• Rationale for sale of target
• Projected costs/purchase price & proposed funding sources.
• How does the opportunity fit into your wider strategy?
Financial analysis
• Focus areas for your bank will include:
• How your financials/KPI’s benchmark against your peer group.
• Trend analysis over the past three years.
• Forecasts and assumptions underpinning these.
• Sensitivities.
• Free cash flow analysis.
• Ability to repay.
• Accounting policies
• Breakeven analysis.
6 | Barclays presentation title | 30 January 2012
Integration plan – share it with your Bank!
Key areas to cover:
• How do you intend to integrate the company?
• Have you developed a 100 day plan?
• Operational assumptions?
• How will progress be monitored?
• Is any extra resource being taken on for the integration process?
7 | Barclays presentation title | 30 January 2012
Due Diligence Valuation
Has the vendor prepared a valuation that could be shared with the Bank?
Valuation addressed to the Bank will also be required.
Financial
Appropriate for larger M&A transactions.
Independent review of information supplied by vendors.
Highlights key risk factors/red flags.
Sensitivities
Legal
Highlight key legal risks.
Corporate structure/legal title to property.
Employment matters
8 | Barclays presentation title | 30 January 2012
Debt quantum • Your Bank will typically consider the
following factors:
• Size/profitability of your business
• Value of freehold assets
• Availability of the assets as security.
• Level/sustainability of cash flow
• Company’s ability to scale
• Company value
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