The situation
- Our client, a non-UK trade buyer, was looking to acquire a UK
manufacturing group
- The main obstacle was a pension scheme, in deficit, where the
vendor had proposed a specific price adjustment for that
deficit
What we did
- Conducted a limited scope exercise to assess whether the
proposed price adjustment was reasonable (conclusion: it was short
of one reflecting the true pension risks)
- Supported the client in negotiating an alternative
adjustment
- Carried out a full due diligence exercise
- Supported our client in trustee discussions
Client benefits
- A significantly increased price adjustment for pensions
(effectively, we reduced the purchase price by around £13m - almost
20% of the deal value)
- A clear appraisal of the likely course of future pension cash
costs, and the impact of the transaction on their financial
disclosures
- A good start to the ongoing relationship with the scheme
trustees
