Protecting VIMBO value
A Construction firm with a leading position in the North of England.
This was a classic VIMBO – a Vendor Initiated Management Buy Out. The two business founders were selling for £10 million largely satisfied by Loan Notes issued by the acquiring NEWCO.
Given the age of the Vendors, they were concerned that, if one died, then the survivor would be left to work with the Buyer Group alone. Both Vendors also wished to protect their Inheritance Tax liability during the 10 year Loan Note redemption schedule.
FAB put in place £10m Loan Insurance on a ‘Joint Life, First Death’ basis – this means that the full sum assured would pay-out on the death of either of the two founders, funding the redemption of all Notes, not just the deceased’s. We also advised on reviewable Whole Of Life cover which synchronised with their intended estate planning.
Sums Assured: £16 million
Lives Assured: 5