Project Argon, a family-owned business operating 25 community pharmacies across the South of England, had traditionally grown through the acquisition of independent pharmacies. Over the last decade, it diversified into pharmaceutical wholesaling, a division managed by the majority shareholder and a contractor in India. This shift led to an exponential rise in revenue - from £28 million to £69 million in just one year. However, the rapid expansion of the wholesaling operation exposed the business to significant financial risks, eventually culminating in substantial losses and an unsustainable financial position. Rapid expansion through diversification and financial strain
As the wholesaling operation was wound down, it became clear that the company faced severe liquidity issues. A detailed management review revealed that stock sales were unable to cover £19.9 million in creditor arrears, excluding bank debt. To address this, FRP introduced an interim finance manager to support the business in developing a daily cash flow model, helping to better manage finances during a difficult period. FRP then conducted a short- term cash flow and options review, followed by contingency planning and an Estimated Outcome Statement (EOS) assessment, which identified key financial constraints, including limited stock availability. Identifying critical financial challenges and liquidity issues
Given the unfortunate financial situation, FRP recommended an accelerated sale via pre-pack administration as the best option for preserving the value of the business and protecting its assets. FRP worked closely with the interim finance manager, management, and secured creditors to manage cash requirements in the lead-up to the sale. A targeted marketing campaign was launched with the help of sales agents, focusing on potential acquirers. Within three weeks, a successful sale was completed, ensuring business continuity and safeguarding jobs during a critical time. Accelerated pre-pack administration sale for continuity
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