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Advising a family-owned
business on how an acquisition may affect covenant

Case studies

The background

We advised the directors of a family-owned business on the potential impact of an acquisition on the covenant afforded to its DB pension scheme.​

The sponsor manufactures sandwiches, salads and desserts for sale in the food-to-go section of supermarkets and convenience stores.​

The acquisition involved the purchase of a part of a competitor’s business, which would increase our client’s market share and provide it with a higher profile with the supermarkets.​

Whilst strategically the planned acquisition appeared sound and would increase the earnings available to support the covenant, the business, which previously had no debt and was cash rich, needed to fund the deal through a significant long-term bank loan.​

Our solution

We prepared a report for the company setting out how the transaction was likely to be viewed by the trustees in light of regulatory guidance regarding corporate transactions. This report was eventually shared with the trustees for information purposes. 

We assisted the directors in putting a suitable package of protections in place for the trustees in the light of the additional leverage in the business post-deal.​

Leading the way 2020: Corporate journey planning

Leading the way 2020: Corporate journey planning

Thought leadership report

This interactive report makes the case for sponsors to drive collaborative journey planning with pension scheme trustees.

Explore our findings

How we can help

We help sponsors of pension schemes understand and manage the costs and risks associated with supporting their current and legacy pension schemes as well as other employee benefits.

We help trustees understand and monitor the employer covenant.

We help pension scheme trustees and sponsors to determine the ultimate destination for their scheme and help them put together a plan to get there, including how to effectively manage the risks they face along the way.

We help trustees achieve their strategic goals, with solution-led, appropriate advice.