A flooring distributor has bought key assets of its collapsed rival Headlam out of administration for £14.9m, and 110 jobs are expected to move across. The deal was announced on 7 October, a month after Headlam entered administration. It shows how fast an administration sale can move.
01What was sold
According to Likewise Group's announcement to the stock market, it bought selected assets of Headlam Group and its subsidiary HFD from the joint administrators. Headlam had supplied floor coverings to independent retailers and contractors.
The purchase includes:
- A warehouse: the freehold Thatcham distribution centre, with its equipment and the stock held there.
- Two businesses: the trade and assets of two specialist flooring brands.
- Brands: Headlam's main intellectual property.
It was an assets-only deal. No Headlam company was bought. Likewise paid £14.9m plus VAT in cash on completion, from money it already had.
Likewise will also help the administrators sell Headlam's remaining stock over the next nine months.
02What it shows a smaller buyer
Most administration sales are much smaller than this. Three features of this deal are common to most of them.
- Speed: Headlam entered administration on 8 September, and the sale was done by 7 October.
- Assets, not the company: the buyer chose what to take, and the company stayed with the administrators.
- Staff: when a business is rescued and transferred, TUPE rules normally move employees across on their existing terms.
The buyer here had cash ready. Most smaller buyers need finance, and that takes time to arrange.
So the time to talk to lenders is before the right business comes up. Our guide to buying a business in administration explains how the sale works and how to have your funding ready. To see what you could borrow, talk to us about business acquisition finance.
