Traynor gets green light to buy Red Flag

RIC Traynor, executive chairman of insolvency firm Begbies Traynor, has bought the Red Flag credit information business from his company in a deal that could be worth up to £1.5m.

The company – which has operations in Birmingham and Stoke – 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 stand-alone acquisition opportunity”.

As a result, 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.

Begbies Traynor believes the deal offers the potential for a return of up to £1.5m of the money it has already invested in the business.

It will also continue to provide back office support including IT, HR and marketing support.

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.