Branta Advises Successful Acquisition of Paragon by Open Brix
Chris Ray • 17 December 2024
Ensuring Stability and Preserving Value in a Complex Market Environment
At Branta, we’re proud to announce our role in the recent acquisition of Paragon Scheme Management Services Limited (Paragon) by OpenBrix. Acting as independent evaluators, we were instrumental in assessing the transaction and supporting the completion of this important deal.
This sale ensures Paragon’s continued operation, safeguarding jobs and preserving value during a challenging period.
The Challenge
Paragon, a trusted name in tenant referencing, was facing financial distress and impending administration. The complexities of the transaction arose because the purchaser, Open Brix, involved a connected party under UK regulations. This meant that the deal required rigorous independent evaluation and validation to satisfy insolvency rules.
The Branta team provided the required Independent Evaluator’s Report under the Administration (Restrictions on Disposal to Connected Persons) Regulations 2021, ensuring the sale could progress smoothly and in compliance with legal requirements.
Why This Deal Matters
The acquisition of Paragon brings significant benefits to stakeholders:
- Preservation of Employment: The deal saved 60 jobs, preventing redundancies close to Christmas.
- Continued Service Delivery: Paragon’s vital tenant referencing services remain operational, preserving trust with agents and landlords.
- Mitigating Financial Liabilities: OpenBrix assumed liabilities, including lease obligations and employee contracts, thereby avoiding a costly business shutdown.
The deal was particularly critical as Paragon received alternative bids, including one from a party seeking to acquire intellectual property only. While financially appealing, this bid did not offer the same value for creditors, employees, or ongoing operations.
The Role of Branta
Branta was engaged to provide an Independent Evaluator’s Report as mandated under insolvency regulations. Leveraging our expertise in corporate finance and restructuring, we:
- Conducted an independent review of the transaction.
- Assessed competing bids for their impact on creditors, employees, and the wider business community.
- Supported the administrators, Sandy Kinninmonth and James Prior at FRP, with timely, transparent advice to enable a swift resolution.
Our conclusion was clear: the Open Brix offer was reasonable, fair, and delivered the most favourable outcome for stakeholders.
A Positive Outcome for All
In the end, the transaction was not just a financial success but a pragmatic solution that safeguarded livelihoods and preserved value. This reflects Branta’s commitment to providing practical, results-driven advisory services for UK SMEs navigating challenging transitions.
We congratulate all parties involved, including the administrators at FRP, for their professional handling of this transaction.
Self-Test Questions for Your Business:
- Are you prepared to navigate insolvency rules when dealing with connected-party transactions?
- How would you handle competing offers to ensure the best outcome for all stakeholders?
- Do you have a clear plan for independent evaluations during distressed M&A scenarios?
- Are your financial advisors experienced in safeguarding operational value during a sale?
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What's going on? If you’ve been watching the news or even just your cost of importing parts or raw materials, you’ll know that things are getting… spicy. The Dollar has taken a knock, the Pound is holding strong (for now), and the Euro is nervously watching from the sidelines. This is no ordinary market flutter — it’s the prelude to what’s being dubbed “Liberation Day,” thanks to the Trump administration’s announcement of sweeping new tariffs. So, what does it mean for you, the UK business owner? Let’s break it down. The Tariff Trouble: What’s Triggered It? Over the weekend, Donald Trump confirmed the US will impose reciprocal tariffs on all countries, effective 2nd April. That includes the UK, EU, Canada — the lot. Markets reacted quickly and nervously. The US Dollar index slipped for the third day running, while Sterling held relatively firm and even gained ground on the Dollar and Euro. Tariffs are set to hit EU car exports first, with a flat 25% on any vehicle not made in the USA. The EU has already promised retaliation. So, we’ve got: A potential full-blown trade war brewing. Worries about global inflation returning. Investors pulling back from risk. UK and EU exporters in the crosshairs. How Currency Is Moving – And Why It Matters USD : Investors are ditching the Dollar. Why? Because tariffs risk economic growth and may force the Fed to hold off further rate hikes. The greenback has lost ground against both the Yen and Sterling. GBP : The Pound is surprisingly stable. Prime Minister Starmer’s “productive talks” with Trump didn’t prevent the tariff threat, but Sterling has remained above 1.29 against the Dollar and 1.19 against the Euro. EUR : The Euro has crept up slightly — mostly because the Dollar is wobbling. But with Germany heavily reliant on car exports to the US, this trade standoff could hit the Eurozone economy hard. To add fuel to the fire, the ECB just cut interest rates by 25bps, and may need to go further. What Does This Mean for UK SME Owners? If you’re importing goods priced in USD or exporting to Europe, the FX markets are going to start affecting your margins — if they haven’t already. Let’s take a couple of examples: Importer of electronics or components from China or the US : The weakening Dollar might look helpful — goods priced in USD cost less in GBP. But beware: tariffs could push base prices up. Exporter of UK-made machinery to Germany : The Euro’s wobble could make your goods relatively more expensive in Europe, even before EU retaliation hits confidence and demand. Don’t Panic — But Do Prepare This isn’t a time to bury your head in the sand. You don’t need to be a currency trader to manage FX risk — but you do need to be aware. Here are a few practical steps to consider: Review your foreign currency exposure : Which contracts, invoices or suppliers are USD or EUR-denominated? Talk to your bank or FX provider : Ask them about forward contracts or hedging tools. Scenario test your pricing : How sensitive are your margins if GBPUSD hits 1.25 or EURGBP shifts to 1.10? Watch out for knock-on effects : Global inflation, slower growth, tighter credit — it all filters down to SME trading conditions. The Bigger Picture We’re heading into a volatile Q2. The FTSE 100 dropped nearly 1% on Monday, and financial stocks are feeling the squeeze. Risk appetite is down. This isn’t just a blip — it’s policy-driven turbulence, and it could persist well into summer. UK SMEs — especially those in manufacturing, import/export, or with international supply chains — should keep close tabs on currency movements and trade policy headlines. Self-Test: What Should You Be Asking Yourself? How much of my revenue or cost base is exposed to USD or EUR currency movements? Have I reviewed my pricing strategy in light of recent FX volatility? Am I using any FX tools to hedge risk, or am I leaving it to chance? What would a 5–10% swing in either direction do to my cash flow or profitability? Final Thoughts It’s tempting to assume that trade wars and currency swings are for the “big boys” to worry about. But for many SMEs, this sort of disruption can mean the difference between hitting your profit targets or missing them entirely. At Branta, we help businesses like yours navigate financial uncertainty, structure for resilience, and plan for sustainable growth — even in volatile conditions. If you’d like a no-obligation chat about your FX exposure, debt refinancing options or M&A strategy, give us a ring . We speak fluent SME.
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