Professional Services
FRP Advisory
Full Credential Description
In this case study, we's Corporate Finance team was engaged to support HSBC and Frontier Development Capital in their decision to finance a management buy-out (MBO) of Hammonds Furniture Group, a family-run business established in 1926 with 89 showrooms across the UK and an annual turnover exceeding £85 million. The challenge faced by the lenders was to assess the viability of the MBO led by the remaining members of the Hammonds family, while also providing necessary growth capital.
To address these concerns, we conducted an in-depth analysis of Hammonds' business operations, focusing on the robustness of financial information and modeling. The team ensured that the debt structures were accurately integrated into the financial forecasts and identified key sensitivity areas within the forecasts and proposed covenants. A comprehensive report was prepared for the lenders, detailing the primary risk factors associated with the lending decision and suggesting potential mitigations.
As a result of we's thorough analysis and strategic advice, the lenders were supported in their decision to proceed with the financing, which enabled the MBO to be successfully executed. This transition allowed Hammonds to operate under revitalized ownership with new funding, positioning the business for growth. Additionally, the collaboration led to improvements in the company's systems and KPI reporting, enhancing the quality of information available to the lenders for ongoing oversight.