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Jeffreys Henry LLP Leads Team of JHI Associates to International Success
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It really is true that the JHI network is greater than the sum of its individual parts. Recently, a large and complex international corporate finance deal set the standard for international co-operation and technical excellence within the JHI network. Nick Michaels, of JHI member firm Jeffreys Henry LLP, explains how the project worked.
Ambitious Plans…
Jeffreys Henry LLP (JH) was approached by an AIM listed company in the UK. This recruitment advertising specialist wanted to diversify and was considering acquisitions in the recruitment sector. JH were recommended by the client’s corporate finance advisers as a specialist provider of due diligence in the recruitment sector. Two acquisitions were managed by JH.
The first acquisition was a UK company with subsidiaries in Hong Kong and Australia. The second acquisition was a company, headquartered in Switzerland with associate companies in Sweden, Germany, the UK, Italy and Spain. As this was the client’s first acquisition in continental Europe, the pressure was on to get it right.
…with Complex Requirements
JH co-ordinated and managed both projects. JHI Associates (wherever possible) were contracted to conduct due diligence on each company locally.
The second transaction was further complicated by a number of factors:
- Size – This was a big transaction, the turnover of the group being in excess of £40m.
- Geography – The complexity of co-ordinating due-diligence across five countries.
- Structure – The acquisition encompassed 11 European companies (three in Switzerland, two each in the UK, Italy and Germany, as well as the Spanish and Swedish entities). These companies had previously operated independently. They were unrelated other than their shared ownership. No consistent accounting policies had ever been applied across these companies and no consolidated audit report had ever been prepared. In addition, some of the companies had never even been audited, as there was no local requirement for it.
Illuminating Advice
The client required a cohesive picture of all these companies, as if they were a single group. The transaction also encompassed a circular to shareholders. JH were appointed as the reporting accountants in preparation of the circular. The relevant JHI Associates were instructed by JH to prepare an audit report for their local subsidiary company. To ensure consistency of approach, specific instructions were issued by JH regarding areas to look at, what to report, and how to report it. JH consolidated this information and presented what was in effect a three year, group audit report, to the client in the UK.
In addition, they were requested to prepare a specific tax report on the best method of completing the acquisition. Each member firm was asked to prepare a report on the tax consequences of the acquisition. Again, JH prepared a consolidated report and made recommendations to the client regarding group structure and head office location. The deal was completed successfully, at the right price, taking advantage of all available tax planning opportunities, resulting in a very happy client.
Together, We’re Stronger
A deal like this allows us all to appreciate the many benefits of being part of an international network with access to so many high quality resources. JH certainly would not have been able to produce such high quality work, in such demanding conditions, without their international associates. In particular, JH would like to thank Rudolph Brauchli of Alltax Group, Basel and Helmut Lohrmann of Lohrmann, Riehle, Laetsch, Durach & Kollegen, Stuttgart, whose commitment, knowledge and good humour made them a pleasure to work with.
For further information, please contact Nick Michaels: nmichaels@jeffreyshenry.com.