After retiring from professional trading in 2018, Jarratt Davis, has officially launched an acquisition strategy of his own. The business will see a focus on the core acquisition of SMEs and targets will include distressed but profitable businesses.
AsAc Investments, the company, will manage assets in-house, and focus initially on acquiring businesses in distress.
Mr Davis earlier explained his goals:
“After retiring from trading in 2018, I decided to take a break, which was naturally extended by the subsequent COVID pandemic.
With everything back to normal, my goal is to acquire and turn around fundamentally good businesses that have fallen on hard times.
Ultimately, I aim to keep each business within my portfolio and grow them organically over time, with quality management teams,” he stated.
Switch in focus
On his retirement from trading, Davis added that he wanted to create long-term value while avoiding market volatility that typically hinders trading performance.
“I believe that businesses are the best vehicles to generate and increase value consistently”, he added.
While targeting companies in distress initially, he also aims to acquire profitable businesses from long-term founders.
He works closely with insolvency practitioners and administrators for deal flow, while preferring to strike deals with business owners directly.
“I always prefer to deal directly with the owner when making a deal. Utilising professional services is vital, it’s also important not to over-complicate,” he said.
Opportunities in the economy
Opportunities for acquiring companies in distress are on the rise in the UK.
According to a report published by the insolvency service, total company liquidations were up a whopping 81% in Q1 2022, from the same period the previous year.
The rise is thought to be caused by the downturn in economic circumstances.
Rising interest rates are the primary catalyst for business failures.
This traditionally causes a knock on effect when firms’ costs rise to cover extra interest payments on debt.
Fundamentally sound businesses can often be thrust into cash flow issues and insolvency.
With the Bank of England expected to increase its rate further in the months ahead, the situation is likely to get worse.
While causing pain for some business owners it can create opportunity for others.
Jarratt Davis is hoping that he can profit from this period of economic uncertainty, and help struggling businesses get back on their feet.