Dealing with Solvent Administration

The Rise of Solvent Administration by Tech Expansion and the Surplus Office Conundrum

As reported in UKTN 11 May 2022:

London is the top destination for US tech firms expanding internationally….

Clearly some of this expansion is via the opening of a new London office.

Alternatively, it is the acquisition of some of London’s outstanding tech companies by those who either may or may not have a presence here. The office space of the acquired company is an ideal position for the purchasing US business to locate their operation if they do not have a presence here.

What becomes of the office space for the local company being purchased when the US suitor already has a UK presence?

Enter the rise of the solvent administration! An often used means of an acquisitive tech business is not to purchase the shares of the target company but to enter an arrangement where the staff and intellectual property (IP) are purchased but liabilities such as rented office space is left with the acquired company.

Maximising the profitability of the deal

Many companies are not versed in matters commercial property and the surplus office space created in the above scenario will quickly become a ‘drag’ on the profitable sale for the directors who sold their business.

There is a means of removing this surplus office liability, saving the acquired company and its shareholders significant funds as we recently did with a client who sold to a US tech giant!

If you have a company in solvent administration with surplus office space, call us, without obligation, to see if we can save your business money!