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Lucena Capital Acquires Impress Group

Suquet’s investment in Impress marks a collaborative effort with Young to chart the company’s progressive course.

Posted: 23rd November 2023 by Courtney Evans
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Gerald Edelman, Chartered Accountants and Business Advisers, advised Lucena Capital in the strategic acquisition of Impress Group, a company established in 1997 with operational sites in Blaydon and Washington. The firm is known for tackling intricate client challenges throughout the North East region and further afield.

Jason Young has ascended to the role of managing director, succeeding the retiring directors George Peel, Steven Young, and David Haley. With a tenure of 23 years at Impress, Jason Young steps up with the backing of Ben Suquet, the driving force behind Lucena Capital. Suquet’s investment in Impress marks a collaborative effort with Young to chart the company’s progressive course.

The announcement of the deal was marked by Jason Young's declaration of entering a thrilling era for Impress. Plans are underway to funnel substantial investments to enhance the company’s offerings. Young spotlighted potential growth sectors and the intent to leverage emerging technologies in precision engineering to keep Impress at the industry vanguard.

 

Could you provide an overview of the strategic approach Gerald Edelman took when advising Lucena Capital on the MBO of Impress Group?

  • Prior to beginning our FDD process we sat down with our client and discussed any specific concerns Lucena Capital had with this particular transaction and ensured that we focussed on these points.
  • Our goal was to focus our due diligence around particularly risky or complex areas of the transaction.
  • This focus allowed us to highlight all potential risks to our client and allow greater levels of attention on how best to mitigate these.

What were the most significant challenges faced during the MBO process, and how did your team work to overcome them?

  • Complex transaction; multiple entities being acquired as part of this transaction – Management did not produce consolidated group accounts. Initial focus was on producing a set of consolidated accounts for our client.
  • Complex areas of the transaction included considering the impact of the disposal of a non-core subsidiary; Impress Precision Machinery as well as the discontinued operations IWL Architectural and Tyne & Wear Fabrications; increased the complexity of our work and increased the level of analysis required to ensure our client was aware of any potential risks to Lucena Capital.

How did Gerald Edelman ensure that the advice provided aligned with both the short-term and long-term objectives of Lucena Capital in the acquisition of Impress Group?

  • We included analysis of key customer dynamics on a consolidated basis (e.g. wins, losses, churn, pricing, volumes, trading terms, length of relationship etc.) as well as analysis of the top 20 customers and 20 suppliers on a consolidated basis); provided insight to Lucena that materially impacted short term decision making.
  • Summary of projected trading results of the Impress Group including current year forecast for the period to March 2028. We included comparison to historic results and commented on any significant trends to provide clear insight to our client to help mould their long-term objectives in their acquisition.

Can you discuss any innovative financial structures or strategies that Gerald Edelman employed to facilitate this MBO?

  • As part of this transaction, we included analysis of the consolidated net working capital profile by key component across the period reviewed, noting key trends and any seasonality and commenting on what appears to be a normal level of net working capital for the Group. Further, we included a review of intra-month cash features of the Group and requirement for any additional working capital; this allowed us to negotiate an additional level of working capital to be left behind by the Vendor’s at completion.
  • Included detailed analysis of net debt in the Group across the period reviewed and quantified the impact of this on Lucena Capital.

 

Post-MBO, what role does Gerald Edelman play in the ongoing relationship with Lucena Capital and Impress Group, and how do you support the newly formed entity in achieving its business goals?

  • Gerald Edelman engages in regular conversation with Lucena Capital and provides ad-hoc advice when required in relation to the post-completion running and operations of the Impress Group.

 

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