Feedback on first deal for a newbie searcher in the UK

by a searcher from Imperial College London

1 month ago

Hello everyone, I wanted to share a deal that I'm currently looking at to get thoughts/feedback from more experienced searchers. This is the first deal for me, so any advice is really appreciated! I'm keeping some details a bit vague for obvious reasons :)
Manufacturing Business based in the UK
Turn Over is ~£3M
Net Profit is ~£400k
There is ~£1M in stock and raw material
There is a manufacturing plant in India, worth around £400k
12 employees in the UK, 30 employees in India
Seller will take all cash from the company, except for enough working capital for 3 months (~£600k)

High level questions:
Any advice on purchasing a business with a manufacturing plant overseas in India? Any specific things to watch out for?
Any advice on financing providers for this type of deal? (i.e. who will be able to raise money on an asset in India)
Any contacts who can help with due diligence in India?
Thank you!

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19 comments

investor from Massachusetts Institute of Technology - MIT Sloan School of Management

Agreed with others here. Sounds like a quite risky setup (unless you get a lot of comfort re the Indian operation) and the fact that the seller is cashing out won’t be very helpful for your financing.

2 weeks ago | like reply | 0 likes

professional from Lancaster University - Lancaster University Management School

As others have said, potentially a complicated first deal that may have funding challenges. If you decide to proceed I have some good contacts in Indian law firms.

3 weeks ago | like reply | 0 likes

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