Wed, Jun 8, 2022

Kroll Acts Buyside for Kybotech Limited to Facilitate a Distressed Acquisition

Kroll was engaged by Kybotech Limited (“the Client”) in January 2022 to assist with the acquisition of Big Home Shop (“BHS”) and PhysioRoom Ltd (“PRL”) (“the Companies”) from Administrators.

Transaction Highlights
 
  • Stock Purchase: £4.3 million cost value | £8m RRP | £1.83 mn price paid (42p/£)
  • Total Deal Value: £2.01 mn
  • Company Financials Y/E 2021: Turnover £6.3 mn | GP 52% | EBITDA (£345,000)
 

Transaction completed in 12 working days from the date of Kroll’s engagement.

Company Background
 
  • The Companies operated as online retailers, with BHS selling goods such as garden furniture and equipment, tools, bathrooms and homeware goods, and PRL selling its own branded physio and exercise equipment.
  • In addition to their own websites, the Companies had a significant presence on online platforms such as Amazon and eBay, amongst other online marketplaces.
  • In 2021, the Companies faced significant stock issues caused by international shipping delays, missing the spring/summer season and leading to a sharp reduction in turnover.
  • The main shareholder and investor withdrew funding for the Companies. The Companies were then placed into Administration on 12 January 2022.
 
Kroll Engagement
 
  • Kroll was engaged by the Client on 19 January 2022 to assist with the acquisition of BHS and PRL from the Administrators.
  • This engagement included analyzing the Companies’ historical financials and the business and assets for sale. Kroll undertook a detailed analysis of the stock inventory, which was the main asset and the driving force behind the Client’s interest.
  • Kroll, acting on behalf of the Client, were the main point of contact between the Administrators, agents and solicitors.
  • Kroll were tasked with negotiating all aspects of the transaction with the scope to ensure the Client was the preferred bidder at the right price, intending to complete the deal as quickly as possible due to the upcoming seasonality of stock.
 
Outcome
 
  • Kroll negotiated a deal with the Administrators at a level significantly less than the Client initially felt would need to be paid to secure the deal. 
  • Kroll confirmed the Client was the preferred bidder in what was a very competitive process.
  • Kroll confirmed the Client obtained a short period of exclusivity to transact due to considerable interest in the opportunity. From the date of Kroll’s engagement, the transaction was completed in 12 working days.
  • Post-transaction, Kroll agreed to terms with the Companies’ freight forwarders to release a further substantial quantity of stock held at Port.
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