How Long Does an Evaluator Report Take?
Pre-pack administration sales often move quickly.
Once the decision has been made to proceed with an administration, there may be employees to protect, customers waiting for certainty, suppliers considering whether to continue trading and a business whose value could deteriorate if the transaction is delayed.
It is therefore understandable that one of the first questions connected purchasers ask us is:
How long will the Evaluator Report take?
The quick answer
At Admin Eval, we typically produce an Evaluator Report within 48 hours of receiving sufficient information to complete our review.
Where a transaction is particularly urgent, we will work with the purchaser, their advisers and the proposed administrator to fit within the transaction timetable wherever possible.
The biggest factor affecting timing is usually not writing the report itself.
It is making sure the necessary information is available.
That is why involving the Evaluator early can make a considerable difference.
If you are still establishing what will be required, our guide sets out what information is needed for an Evaluator Report.
Is there a statutory 48-hour deadline?
No.
ARR 2021 does not impose a statutory 48-hour deadline for producing an Evaluator Report.
However, Insolvency Service guidance states that ideally the turnaround time should be 48 hours from the point at which the Evaluator has been provided with sufficient information to undertake and complete the report.
That distinction is important.
The 48 hours does not necessarily begin when the initial instruction is received.
Before the report can be completed, the Evaluator needs enough information to understand the proposed transaction and reach an independent conclusion.
Why are Evaluator Reports often urgent?
Many Evaluator Reports are required in connection with pre-pack administrations.
In a pre-pack, the terms of the sale are negotiated before the administrator is appointed, with completion taking place immediately or shortly after the administration begins.
There are good commercial reasons for moving quickly.
Delay can potentially affect:
customer confidence;
employee retention;
supplier relationships;
work in progress;
contracts;
goodwill;
the value of the business generally.
ARR 2021 recognises that an Evaluator Report can be obtained before the company formally enters administration.
This allows the scrutiny process to take place without unnecessarily delaying completion.
If you are unsure whether your proposed transaction falls within the regulations, start with our guide to whether you need an Evaluator Report for a pre-pack administration.
What information needs to be available?
Every transaction is different, but we will normally need information covering three main areas.
The company
We need to understand the business entering administration, what has caused its financial difficulties and the circumstances leading to the proposed sale.
The proposed purchaser
We need details of the purchaser, its connection with the company and, where relevant, information demonstrating its ability to complete the proposed transaction.
If there is uncertainty over the relationship between buyer and seller, our article explains who is a connected person in a pre-pack administration sale.
The proposed sale
We need to understand:
what is being purchased;
the purchase price;
how and when the consideration will be paid;
how that price has been arrived at;
the valuation evidence;
any marketing undertaken;
why the proposed transaction is being recommended;
the expected outcome for creditors.
Where appropriate, we may also need business plans, forecasts or information supporting any deferred element of the purchase price.
The more complete this information is at the outset, the easier it is to progress the report quickly.
What commonly delays an Evaluator Report?
The most common delays occur when important information is missing or has not yet been finalised.
Typical examples include:
the final purchase price has not been agreed;
the assets being purchased have not been clearly identified;
valuation reports are outstanding;
the terms of deferred consideration are unclear;
the purchaser’s business plan or forecasts are not available;
there is uncertainty over the purchaser’s connection with the company;
a previous Evaluator Report has been obtained but has not been provided;
material changes are made to the offer after the Evaluator has begun their review.
None of these necessarily means the transaction cannot proceed.
But identifying them early makes the process much easier.
When should the Evaluator be instructed?
Ideally, as soon as it becomes clear that:
there is likely to be an administration;
a connected person intends to purchase all or a substantial part of the business or assets; and
the proposed disposal is likely to take place during the first eight weeks.
You do not need to wait for the administration appointment.
Early instruction allows us to identify what will be required and start reviewing available information while other aspects of the transaction are being finalised.
For more detail on how we handle a case from initial call through to completed report, see how our Evaluator Report service works.
Can the report be completed before administration?
Yes.
This is common — and often necessary — in pre-pack transactions.
ARR 2021 requires the administrator to have received and considered the qualifying report before making the substantial disposal.
It does not require the company to have already entered administration when the purchaser instructs the Evaluator or when the report is prepared.
That means the report process can run alongside the legal and insolvency work leading up to the administrator’s appointment.
What happens if the sale terms change?
This is an important point.
The Evaluator’s opinion relates to a specific proposed disposal.
If there is a material change to the offer after the report has been completed, a further Evaluator Report will be required in respect of the amended proposed disposal.
Changes might include alterations to:
the purchase price;
the assets being acquired;
payment terms;
deferred consideration;
the identity of the purchaser;
other material elements of the transaction.
If terms are still developing, it therefore helps to keep the Evaluator informed.
What happens during the 48-hour period?
Our process is designed to be straightforward.
Once we have sufficient information, we:
establish the structure of the proposed transaction;
review the information and supporting evidence;
raise any necessary questions;
assess the consideration and grounds for the proposed disposal;
prepare the report in accordance with ARR 2021;
carry out our final review; and
issue the completed report to the purchaser.
Where necessary, we can also communicate directly with the purchaser’s advisers or the insolvency practitioner to resolve information queries efficiently.
You can read more about the underlying statutory process in What Is an Evaluator Report Under ARR 2021?
Does a quick report mean a box-ticking exercise?
No.
Speed matters because administration transactions can be extremely time-sensitive.
But independence matters just as much.
The Evaluator must reach their own conclusion on whether they are satisfied that the consideration being provided and the grounds for the substantial disposal are reasonable in the circumstances.
A report therefore needs sufficient evidence behind it.
Our approach is to make the process efficient without compromising the independent scrutiny required by ARR 2021.
Need an urgent Evaluator Report?
If you are involved in a connected-party administration sale, early contact is usually the best way to avoid the Evaluator Report becoming a last-minute obstacle.
Admin Eval specialises exclusively in Evaluator Reports under ARR 2021.
We work with directors, purchasers, solicitors, accountants and insolvency practitioners throughout the UK and typically produce reports within 48 hours once sufficient information to complete our review has been received.
Contact Admin Eval to discuss your timetable.
Email: enquiries@admineval.co.uk
Telephone: 07824 348338
FAQs
Can an Evaluator Report be completed in 24 hours?
Potentially, depending on the complexity of the transaction and whether all the necessary information is immediately available. Where a matter is especially urgent, speak to us as early as possible.
Is 48 hours guaranteed?
Our normal target is within 48 hours once we have sufficient information to complete the report. Timing can be affected by the complexity of the transaction or outstanding information.
Can I instruct Admin Eval before the administrator is appointed?
Yes. In pre-pack transactions this will often be preferable and may be essential where completion is intended immediately following appointment.
What is the main cause of delay?
Missing or changing information is usually more likely to cause delay than preparation of the report itself.
Can the report be started before the purchase price is final?
We can start reviewing the transaction and available information, but the Evaluator ultimately needs to consider the actual terms of the proposed disposal.
Will changing the offer delay completion?
It may. A material change to a proposed disposal after a report has been completed requires a further report, so changes should be raised immediately.
You can find more short answers on our Evaluator Report FAQs page.
