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 challenges, we conducted an in-depth analysis of Hammonds' business operations. The team collaborated closely with management to ensure that the financial information and modeling were robust. They meticulously overlaid debt structures onto forecast models and identified key areas of sensitivity in the forecasts and proposed covenants. A comprehensive report was prepared for the lenders, detailing the primary risk areas 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 take place. 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, ensuring that the information provided to the lenders was reliable and actionable for future operations.