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Early Options is a bespoke, structured process which supports corporates to explore their sale, refinance and investment options in an accelerated timescale. Our process can help to address many of the issues that stakeholders face, eliminate uncertainty and enable value to be maximised. Our team are nationally recognised for delivering creative restructuring solutions in a short timeframe.

The difficulty for many stakeholders is identifying and quantifying the potential options; issues faced may include:

  • Can the business be refinanced?
  • What are the sale options?
  • Is a Management Buyout (MBO) feasible?
  • Can we find a specialist equity or debt provider at short notice?
  • How will the current market have impacted the valuation of the business?

Overview of the process

  

Early options process overview

 

Using KPMG’s network of trade buyers, financial investors, traditional lenders, credit funds and specialist investors, we work closely with management teams to deliver options to the point of execution. This process allows for flexibility by procuring interest in the business on all available bases. In doing so, goodwill value can be maintained and loss of control avoided.

Our typical Early Options process lasts four to twelve weeks. However, we will design a bespoke process to ensure that we can deliver in accordance with any required timeframe. In as little as 24 hours of our engagement, our team can start reaching out to potentially interested parties.

By adopting a collegiate and collaborative approach with key stakeholders, creative and innovative solutions can be secured through our Early Options process

Will Wright Partner

What makes us different?

  • This is all that we do: Our dedicated national Early Options team focuses exclusively on special situation transactions. The team consists of a mixture of individuals with Corporate Finance and Restructuring expertise.
  • We have a track record of successful outcomes: We have an enviable track record of getting deals done, including several highly challenging multi-jurisdictional transactions – our credentials demonstrate this. We focus on providing practical advice and hands on support to ensure innovative solutions are coupled with robust execution.
  • We lead this market: We are recognised by our clients and investor contacts as the leading special situations M&A advisor in the UK market. We led over 50 accelerated Early Options processes last year.
  • Always senior led: We understand that transactions need senior input to navigate through uncertain times. We have a proven track record in delivering solutions across a range of complex capital structures and meeting the clients’, lenders’ and investors’ expectations.
  • We have in-depth sector knowledge: We will draw on our dedicated Corporate Finance sector experts to enhance the insights provided throughout our transactions.
  • Independent, insightful and objective: In challenging circumstances, working with an advisor you can trust is key to delivering the optimal solution.

Should you have a query which you feel KPMG may be able to assist you and your business with, please do not hesitate to contact one of the team as we would be delighted to help.

Within a matter of weeks, we can help to address the many issues that stakeholders face, eliminating uncertainty and enabling value to be maximised.

Sam Birchall Associate Director

Case studies

Project Apollo

Sector: Manufacturer and retailer

Turnover: £25 million

Situation: The shareholder of a furniture manufacturer and online retailer withdrew support for the business at short notice and the Board approached KPMG’s Early Options team for help. The business was forecasting to run out of cash and in the absence of further liquidity would have entered an insolvency process.

Our approach: We were engaged to run an accelerated process to secure a sale, refinance or investment for the corporate within two weeks. We quickly mobilised a specialist team of Early Options and sector specialists to market the business and deliver a transaction within the liquidity runway.

Outcome: We delivered three executable options for the Board and a solvent sale of the business to a trade competitor within 10 days. As part of the transaction a working capital facility was provided by the new owner immediately following the deal.

Project Dunsley

Sector: Retail

Turnover: £10 million

Situation: The Board of an online fast fashion retailer approached KPMG for advice. The impact of a challenging sales period, combined with significant investment into the Company’s infrastructure made during the prior year, resulted in increased cash flow pressure and culminated in a negative EBITDA of £2.5 million being reported.

Our approach: KPMG were engaged to run a competitive Early Options process to help the board consider the Company’s investment options. We worked closely with the Board to produce a succinct Information Memorandum to support an accelerated marketing process over four weeks.

Outcome: The business secured new investment through the process which enabled the business to continue trading as a going concern, which represented the best possible outcome for the Company and its stakeholders.

Project Wansley

Sector: Telecommunications 

Turnover: £150 million

Situation: A private equity backed international mobile phone business approached KPMG for support in assessing the available sale and investment options. The business had been experiencing a decline in revenue and required additional funding to execute the Board’s turnaround plan.

Our approach: We launched an options process over nine weeks which was designed to find a new partner for the business through a discreet marketing campaign. As part of the Early Options process we worked closely with the Board to help them manage their stakeholders through the restructuring, particularly the syndicate of lenders.

Outcome: A sale of the equity was achieved through the process, providing a solution for the private equity sponsor that was looking to exit the investment.

Project Ronson

Sector: Casual Dining

Turnover: £88 million

Situation: The business had been loss-making for several months and had breached a liquidity covenant. The Board had requested further financial support from their stakeholders to execute a turnaround plan. Further funding was not forthcoming from the shareholders and the business was at risk of insolvency.

Our approach: The Board engaged KPMG to explore the sale, refinancing and restructuring options available to the business. This involved assisting Management in preparing their detailed turnaround plan, contacting a range of financial and trade parties outlining the investment opportunity and managing key stakeholders appropriately throughout the process.

Outcome:  Through the Early Options process, six offers were received for the business, the majority of which were conditional on a CVA being approved by creditors. A comprehensive financial and operational restructure was delivered as part of the process, alongside the implementation of a CVA geared at restructuring the restaurant portfolio.


Further credentials

Project White

Introduced to this produce business to run an Early Options process over a three week period. Process resulted in two deliverable options.

Summary: Engaged with the Company at a late stage of stress to run an options process which included refinancing and sale options. Assisted in stakeholder and cash management.

Outcome: Delivered a sale option held ‘completed’ in escrow to protect lenders downside risk whilst the final restructuring option was considered and then finalised. Business restructured and new equity introduced without the need for an insolvency process.

Project Carpet

Introduced to this frozen food manufacturer to run an Early Options process over a three week period. Process resulted in the sale of the Group's debt avoiding a Group wide insolvency.

Summary: Engaged with Group in advanced stages of stress to run options process with a view to refinance the Group. Contact was made with an extensive list of parties in a short space of time. Negotiated a one week delay in the insolvency proceedings with the Group's bank to find solvent soution.

Outcome: Debt wes sold to a turnaround investor to prevent group-wide insolvency. Loss making subsidiary was placed into administration.

Project Flight

Introduced to the Company to run a 10 week process looking at all options for the business. Process resulted in the refinance of the Company’s banking facilites.

Summary: Engaged with company at early stage of stress to run options process targeting ABL's in the first instance. Contact was made with extensive list of parties in a short space of time.

Outcome: Company was successfully refinanced without the need for an insolvency process.

Project Beetle

Introduced to haulier to run an Early Options process over a nine week period. Process resulted in third party cash injection.

Summary: Engaged with the business following a loan covenant breach. We assisted the Board contact an extensive network of over 200 international trade competitors, lenders, credit funds and turnaround investors.

Outcome: £1 million of new equity introduced without the need for an insolvency process. New financing has enabled the Company to restructure saving 300 jobs.

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