Rescuing Househam Sprayers: How a Strategic Acquisition Saved Jobs and Secured the Future
Why a connected-party sale preserved value, protected jobs and gave a struggling manufacturer a new lease of life
In the world of business restructuring, sometimes the best outcome isn’t just about maximising asset value - it’s about ensuring continuity, protecting jobs, and preserving goodwill. At Branta, we recently played a key role in evaluating the acquisition of Househam Sprayers Limited, a Lincolnshire-based agricultural machinery manufacturer, after it fell into administration.
This case highlights the importance of an informed, strategic approach to business rescue. Here’s how a well-structured transaction safeguarded the company’s future while delivering the best possible outcome for creditors.
The Situation: A Company in Distress
Househam Sprayers, a well-known designer and manufacturer of self-propelled crop sprayers, faced financial difficulties and was on the verge of administration. The appointed administrators, FRP Advisory, explored options to maximise value for creditors while also considering the wider implications of a potential collapse.
The most viable offer came from Househam Group Limited (HGL), a newly formed entity controlled by Robert Willey, a director of the original company. However, because this was a sale to a connected party, UK regulations required an Independent Evaluator’s Report (IER) to ensure transparency and fairness. This is where Branta came in.
Evaluating the Offer: A Fair and Reasonable Deal?
When assessing connected party transactions, our role is to determine whether the deal represents a fair and reasonable outcome. In this case, the key points of HGL’s offer included:
- The acquisition of business assets, with a mix of upfront and deferred payments.
- An additional offer for a property linked to the business.
- A commitment to taking on the company’s workforce, avoiding significant redundancy and employee claims.
- A structured debt recovery agreement, allowing for creditor recoveries while supporting ongoing operations.
At first glance, the offer seemed lower than the break-up value of the company’s assets. However, the crucial factor was that selling Househam as a going concern would significantly improve overall creditor recoveries while also maintaining business continuity.
Why a Going Concern Sale Made Sense
Breaking up the company and selling assets individually might have generated more immediate cash but at a cost:
- Lost goodwill and brand value – The Househam name would likely disappear, eliminating any long-term return for creditors.
- Lower recoveries for stock and debtors – The administrators estimated that a liquidation scenario would generate significantly lower stock recoveries alone.
- Higher costs of winding down – Holding, agent, and legal costs would have eroded creditor returns.
- Significant employee liabilities – Without a TUPE transfer, staff claims for redundancy and notice pay would have placed a heavy financial burden on the company.
By contrast, the deal with HGL allowed the business to restart operations with minimal disruption. The potential upside for creditors - including enhanced recoveries from stock, continued revenue streams, and mitigated employee claims - was substantial.
Lessons for Business Owners and Investors
This case is a textbook example of why business rescue isn’t just about maximising asset value - it’s about looking at the bigger picture. Key takeaways include:
1. A Pre-Pack Can Be the Best Option
Selling a distressed business to a connected party often raises concerns, but when properly structured and independently evaluated, it can be the best route to value preservation.
2. Deferred Consideration is a Risk - But Can Work
In this case, part of the purchase price was deferred over time. While deferred payments always carry risk, they were backed by a personal guarantee, and the structure allowed the business to secure funding and maintain cash flow.
3. Employee Continuity is a Key Factor
Keeping the workforce intact didn’t just save jobs—it materially improved the deal for creditors by eliminating redundancy claims and preserving operational capacity.
4. The Role of an Independent Evaluator is Critical
Regulations require an independent evaluation to protect creditors from undervalued connected-party sales. Our report confirmed that this transaction was the best available outcome.
Conclusion: A Win-Win Outcome
Househam Sprayers’ rescue shows how a well-executed acquisition strategy can deliver financial stability while ensuring business continuity. With Branta’s expertise in independent evaluation, we helped secure a deal that not only satisfied regulatory requirements but also provided a strong future for the business and its stakeholders.
If you’re facing financial distress, considering an acquisition, or need an independent evaluation, we’re here to help. Contact Branta today to discuss how we can support your business.
Self-Test: Is Your Business Prepared for a Crisis?
- Do you have a contingency plan if your business faces financial distress?
- Would your business assets generate more value in a break-up sale or as a going concern?
- Have you considered the impact of employee claims and liabilities in a restructuring scenario?
- Would an independent evaluation help provide credibility to a restructuring deal?
