Traynor buys Red Flag business
RIC Traynor, executive chairman of insolvency firm Begbies Traynor, has bought the Red Flag credit information business from his company in a deal worth up to £1.5m.
The company initially put the Red Flag business up for sale in July last year but said that following talks with potential buyers it received feedback which suggested that “the business was not yet sufficiently established for consideration as a standalone acquisition opportunity”.
As a result, Mr Traynor has acquired a controlling interest in Red Flag Alert LLP after agreeing to inject up to £1m in new capital to fund ongoing losses and its future development. Some 24 staff will now transfer from Begbies Traynor to Red Flag Alert LLP.
The deal also sees 24 staff transfer to Red Flag Alert from Begbies Traynor and offers the potential for a return of up to £1.5m of the money it has already invested in the business.
Begbies Traynor has also retained a minority stake in the venture and will continue to provide backoffice support including IT, HR and marketing support.
The firm said it had consulted with its Nominated Advisor who deemed “the terms of the transaction are fair and reasonable” for shareholders.
In the year ended April 30 2011, Red Flag generated revenues of £200,000 but declared an operating loss of £700,000. It also had net liabilities of £30,000.
