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Business case

Acquisition of an equestrian business in west Europe

Context

Our client, a fund based in Belgium, was acquiring a supplier of equestrian fashion and horse-riding accessories, mostly active in the Dutch and German markets. The target focused on high-end and budget segments and was still owned by its founder. The fund intended to support the target’s growth by providing growth capital and contributing its extensive knowledge of the European consumer industry.

Key Takeaway

We were able to take our work beyond a typical due diligence engagement, extending our support to include preparing pro forma financials, analysing the SPA in depth, defining the purchase price mechanism, preparing fund flows, defining working capital financing requirements with banks and preparing key post-integration items. Our added value was in providing overall support to help our client make an informed decision. Additionally, our close cooperation with other advisers, such as tax and legal, and finding solutions to potential post-transaction risks was highly appreciated by our client.

Accuracy Role

The fund was medium-sized and depended heavily on its advisers throughout the transaction. We provided an independent view and support in discussions concerning the purchase price, SPA clauses and structuring the acquisition. Analysing the target was challenging due to several factors including seasonality, limited availability of historical information, incomparable reporting between entities and the nature of related party transactions. Our investigation’s key issues related to the target’s future earnings: it was highly dependent on one brand and one client. A key question was whether the company could maintain its performance; we therefore performed a thorough analysis of the order book and seasonality. Our extensive net debt analysis also led to a significant adjustment in the purchase price.

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