Specialist sectors & services

Sector specialisations

In many transactions, GKA Capital’s corporate finance skills can be applied equally effectively, regardless of whether or not it has in-depth knowledge of the industrial or service sector in which its client operates. However, its directors and associates have experience  working in all major sectors and, where appropriate, the firm includes sector specialists – drawn from within or outside GKA Capital – in its advisory teams. Sector specialists are supported by a core of highly experienced corporate finance specialists.

Other situations requiring the corporate finance advice that GKA Capital provides, include the following:

Accelerating profits and equity value growth

Historic revenue and profit growth, on their own, do not create equity value in a business. Any investor has to believe that profits and cash flow are going to continue in the future – however, it is often difficult to evidence that. Taking the right steps to improve profit growth and reduce risk will always dramatically increase value in the eyes of a buyer.

There are typically five reasons why clients ask us, GKA Capital, to help them produce an equity growth plan:

• You need a practical business plan to create growth
• You want to reach a certain valuation target and sell your firm in a few years’ time
• It is time to optimise value now in preparation for a sale in the next year;
• Exit strategy is now on the boardroom agenda for one or more of the major shareholders
• You want the business to be sustainable and independent of you.

Our approach and how we make a difference: In order to achieve your objectives, we will work with you to determine the current value of the business and agree what valuation target you would like to achieve. We will benchmark your current growth performance and identify those actions that will maximise growth to deliver your target value. Then we will create a plan with you and help you make it happen. The overall process was originally developed for businesses in the consulting sector and more recently with wider application. It is called the equity growth accelerator (EGA) for consulting firms. This enables you both to track and drive your progress against 80 critical success factors and see the resultant valuation in real time.

We start with a workshop to do the valuation, performance assessment and growth plan, then we help you achieve quick wins and momentum over a six month period. If we both enjoy the experience, we will structure a support package through to exit that aligns our interests with shareholders.

The methods used are now well proven and we are proud of the results that have been achieved. Many business owners and managers using the EGA have transformed their firms and gone on to achieve the ultimate success of either selling their business or partnering with an external investor to support the next stage of their journey.

Whatever success looks like for you in your business, if you would like to know more please contact us.

Protecting or improving the position of particular stakeholders – Equity and debt restructurings

Companies may have multiple forms of capital, including different classes of ordinary shares, preference shares, options, warrants, mezzanine funding and senior debt. In some cases, management teams or other stakeholders may have special rights through ratchet and similar mechanisms. There will be times when the interests of the holders of each class of capital are not aligned. In this case, GKA Capital represents the members of one particular class ensuring the best possible result for them is achieved.

Companies sometimes need to restructure their capital because trading is not going as well as planned – in which case they may ask debt providers to convert their loans to equity. Alternatively, if trading is going well, they may seek to re-finance expensive equity funding by raising cheaper debt to repay part or all of the equity. GKA Capital has in-depth knowledge of the requirements of debt and equity providers in these circumstances and guides its clients through restructurings, making introductions to sources of funding as appropriate.

Quoted companies - Independent adviser

GKA Capital acts as independent adviser to quoted companies and those seeking to obtain a quote via an initial public offering ('IPO'). In this respect, it is independent in a way that is not possible for a nominated adviser for the purposes of the alternative investment market as the nominated adviser has responsibilities to the London Stock Exchange as well as the client, or a stock broker who has client relationships with investors as well as the business receiving advice on how to raise funds.

When advising companies on an IPO, GKA Capital assists with all aspects of the process, from preparation and the decision to carry out the IPO, to the evaluation of pricing achieved in the IPO and admission to the relevant stock exchange. In some instances, it will advise its client to adopt a twin track process in order to evaluate as precisely as possible the relative merits of IPO versus trade sale.

Strategic change

Businesses need a clear strategy and sense of direction to deliver sustainable, profitable growth, and to respond effectively to current and future challenges. Failure to establish and follow such a strategy can lead to company 'drift' and lost opportunities.

Where clients need advice in this respect, we work with our partner TCii Strategic and Management Consultants, which specialises in enabling corporate change through strategy, people and processes. It has a track record of helping companies embrace change positively and successfully, giving them a clear road map for the future and enabling them to distinguish the business opportunities that will lead to profitable growth.

Effective planning is only the first stage in the strategic change process: implementation is the most difficult part. Poor execution of the plan can mean losing much of the strategy’s potential financial value. TCii helps clients to develop and implement their strategic plans in a way that enables them to achieve the stated objectives while remaining alert and open to new opportunities as they unfold.

Valuations

Valuations may be required for tax purposes, to settle an arbitration or simply to enable the owners of a business to decide what strategic direction to take – for example whether or not to commence a sale process. GKA Capital’s principle activities, whether buying, selling or raising money, almost always involve forming a practical view on valuation. The firm is therefore very well placed to provide valuation advice as and when needed by its clients.

Expert witness work

GKA Capital’s expertise in its chosen field within corporate finance is such that members of the firm have been called to act as expert witnesses in cases relating to these activities. As the members of the team are all highly experienced – with a minimum of 20 years each in business – they are particularly well placed to carry out this role.