What Information Is Needed for an Evaluator Report?
If you are buying a business or assets from a company in administration, and you are connected to that company, you may need an Evaluator Report before the sale can complete.
One of the first questions connected purchasers ask is:
What information do we need to provide?
The answer will depend on the transaction, but the process is usually more straightforward than people expect. In most cases, much of the information already exists because it has been prepared for the proposed administrator, solicitor, accountant, valuer or purchaser.
At Admin Eval, we help connected purchasers and their advisers understand what is needed, why it is needed, and how to provide it in a clear and practical way. We can often obtain much of the information directly from the proposed administrator which is often a more efficient way of getting some of the information that is required.
The quick answer
For an Evaluator Report, the purchaser will usually need to provide information about:
the company entering administration;
the proposed purchaser;
the connection between the purchaser and the company;
the business or assets being sold;
the proposed purchase price and payment terms, and any security being provided;
any valuation evidence;
any recommendation letter from the administrator’s valuation agent;
the background to the company’s financial difficulties and steps taken to try to avoid formal insolvency;
the reasons and rationale for the proposed sale;
the expected outcome for creditors and other stakeholders;
any marketing or alternative sale process;
draft legal transactional paperwork;
any previous Evaluator Report obtained in relation to the proposed disposal.
The purpose of this information is to allow the evaluator to form an independent view on whether the consideration and the grounds for the proposed disposal are reasonable.
For a wider explanation of when a report may be needed, see our guide: Do You Need an Evaluator Report for a Pre-Pack Administration?.
Why does the evaluator need information?
An Evaluator Report is not a simple formality. The evaluator must provide an independent written opinion on the proposed sale.
The report will usually state whether the evaluator is satisfied that:
the consideration to be provided for the sale is reasonable; and
the grounds for the disposal are reasonable.
To reach that conclusion, the evaluator needs enough information to understand the transaction properly.
That does not mean the process needs to be complicated. It simply means the evaluator needs a clear picture of what is being sold, who is buying it, why the sale is being proposed as the most appropriate way forward, and why the proposed terms are commercially reasonable.
You can read more about our approach on our Evaluator Report services page.
Who provides the information?
The connected purchaser is responsible for obtaining the Evaluator Report.
In practice, this means the purchaser will usually instruct the evaluator and is ultimately responsible for providinge the information required for the report.
However, the purchaser will often need help from others, including:
the proposed administrator;
the purchaser’s solicitor;
the company’s accountant;
asset valuers;
management;
financial advisers;
agents involved in any marketing process.
At Admin Eval, we are used to working with purchasers and their advisers to identify what is needed and avoid unnecessary delay. We can obtain what we need in the most efficient way possible.
1. Details of the company entering administration
The evaluator will need basic information about the company that is entering, or has entered, administration.
This will usually include:
the company name;
company number;
registered office;
trading address;
nature of the business;
Summary of trading history;
details of the proposed administrator;
expected date of administration, if not already appointed.
The evaluator may also need background information about the company’s financial position and the circumstances leading to the proposed administration.
This helps place the proposed sale in context.
2. Details of the proposed purchaser
The evaluator will also need information about the proposed purchaser.
Where the purchaser is a company (which is nearly always the case in our experience), this may include:
company name;
company number;
registered office;
directors;
shareholders;
trading status;
date of incorporation;
funding position.
This information helps the evaluator understand who is buying the business or assets and whether the purchaser is connected to the company.
3. The connection between the purchaser and the company
A key part of the Evaluator Report process is understanding the connection between the proposed purchaser and the company entering administration.
The purchaser should be ready to explain whether the connection arises because they are, for example:
a current director;
a former director;
a shadow director;
a shareholder;
part of the existing management team;
a company controlled by the same directors or shareholders;
a group or associated company;
otherwise connected with the company.
In many pre-pack sales, the connection is straightforward. For example, the existing directors may be buying the business and assets through a new company.
In other cases, the position may need more careful explanation.
If there is any doubt about whether a person is connected, it is sensible to raise this early with the proposed administrator or legal adviser.
4. Details of the business or assets being sold
The evaluator will need a clear description of what is being sold.
This may include:
goodwill;
stock;
plant and machinery;
fixtures and fittings;
vehicles;
intellectual property;
websites and domain names;
customer lists;
work in progress;
contracts;
book debts, if included;
business records;
leasehold interests;
trading name;
any other assets included in the sale.
It is also helpful to confirm what is not being sold, particularly if there are excluded assets or retained liabilities.
A clear asset schedule can make the process much easier.
5. The proposed purchase price
The evaluator will need to understand the consideration being offered for the business or assets.
This should include:
the total purchase price;
how the price has been allocated between asset classes;
whether the price is payable on completion;
whether any part is deferred;
whether there is any earn-out or contingent payment;
;
whether the purchaser is assuming any liabilities;
the source of funds.
The payment terms matter because the evaluator is not only looking at the headline price. The timing, certainty and structure of the consideration may also be relevant.
For example, a cash offer payable on completion may be viewed differently from a deferred payment arrangement dependent on future trading.
6. Valuation evidence
Valuation evidence is often one of the most important parts of the information pack.
The evaluator may need to see:
asset valuation reports;
goodwill valuations;
stock valuations;
plant and machinery valuations;
property valuations, if relevant;
agent advice;
management estimates;
comparable offers;
details of how the proposed price was calculated.
The valuation evidence does not always need to be lengthy or complicated, but it should be clear enough to support the proposed consideration.
If the transaction is urgent, it is helpful to gather valuation evidence as early as possible.
7. Background to the company’s financial difficulties
The evaluator will usually need to understand why the company is entering administration and why a sale is being proposed.
This may include information about:
trading losses;
cashflow pressure;
creditor arrears;
HMRC debt;
rent arrears;
loss of key customers;
funding issues;
litigation or disputes;
supply chain problems;
wider market pressures;
failed restructuring attempts.
This background helps the evaluator understand the commercial context for the proposed sale.
The purpose is not to judge the directors’ conduct. The purpose is to understand why administration and a sale are being considered, and why the proposed disposal is said to be reasonable.
8. Reasons for the proposed sale
The evaluator will need to understand why the administrator is proposing to sell the business or assets to the connected purchaser.
Relevant reasons may include:
preserving goodwill;
protecting jobs;
maintaining customer relationships;
avoiding a break in trade;
achieving a better outcome than closure;
completing a sale quickly before value is lost;
limited interest from third-party purchasers;
specialist knowledge held by existing management;
funding availability from the connected purchaser.
The evaluator will consider whether the grounds for the proposed disposal appear reasonable based on the information provided.
This is a key part of the report.
9. Marketing or alternative offers
Marketing is a requirement in the vast majority of cases and the evaluator will usually need details of what marketing has been conducted.
This may include:
who marketed the business or assets;
how long the business was marketed for;
who was approached;
whether any advertisements were placed;
how many expressions of interest were received;
whether any third-party offers were made;
why the connected purchaser’s offer is being pursued.
If there has been no marketing process, or very limited marketing, the evaluator may need to understand why. This is by no means fatal, as long as there is a legitmate and reasonable explanation for this.
In some urgent situations, there may be limited time to market the business before value is lost. That does not automatically mean the sale is unreasonable, but the reasons should be clearly explained.
10. Expected outcome for creditors
The evaluator may need information about the expected outcome for creditors.
This could include:
estimated asset realisations;
estimated costs of administration;
secured creditor position;
preferential creditor position;
unsecured creditor position;
comparison with alternative outcomes;
estimated outcome if the business closed;
estimated outcome if assets were sold separately.
The evaluator is not preparing the administrator’s statement of proposals or outcome statement, but creditor impact is often relevant to the overall assessment of the proposed disposal. It may be relevant to understand if any secured creditor is supprotive of the proposed transaction.
11. Employee and trading position
Where the sale involves the continuation of the business, the evaluator may need information about employees and ongoing trading.
This may include:
number of employees;
whether employees are expected to transfer;
whether trading is continuing;
whether key customers or suppliers are being retained;
whether there is a risk of contracts being lost;
whether there is a risk of goodwill reducing if the sale is delayed.
This information can help explain why speed matters and why a connected-party sale may preserve value.
12. Funding evidence
The evaluator may need to understand how the purchaser will fund the acquisition.
This may include:
bank statements;
proof of funds;
funding agreements;
investor support;
director funding;
asset finance;
confirmation of completion funds from solicitors.
viability statement/ cash flow, particularly if there is to be deferred consideration.
The level of evidence required will depend on the structure of the transaction.
The evaluator needs to understand not only what is being offered, but whether the consideration is likely to be available on the agreed terms.
13. Draft sale agreement or heads of terms
Where available, it is helpful to provide the draft sale agreement, heads of terms or offer letter.
This can help confirm:
what is being sold;
the price;
payment terms;
excluded assets;
assumed liabilities;
completion arrangements;
conditions;
any deferred consideration;
any guarantees.
If the sale agreement is not yet final, a draft or summary of agreed terms may still be useful.
14. Any previous Evaluator Report
If a previous Evaluator Report has been obtained in relation to the proposed disposal, this must be addressed.
The purchaser should confirm whether:
any previous report has been obtained;
any previous evaluator was approached;
any draft report was prepared;
any previous report reached an unfavourable conclusion;
any previous report related to the same or a similar proposed sale.
This is important because the regulations are designed to avoid opinion shopping.
If there has been a previous report, it should be raised at the outset. If there has not, the purchaser may be asked to confirm that.
For more common questions about the process, see our FAQs.
What if you do not have all the information?
It is common for some information to be incomplete when the process begins.
That does not necessarily prevent the evaluator from starting work. However, missing information may delay the report or affect the evaluator’s ability to reach a conclusion.
The best approach is to engage early and provide what is available.
At Admin Eval, we help identify any gaps at the start of the process so that the purchaser and advisers know what still needs to be provided.
How to make the process smoother
The process is usually smoother when the parties provide a clear pack of information at the outset.
A good information pack might include:
company details;
purchaser details;
explanation of the connection;
asset schedule;
offer letter or heads of terms;
valuation evidence;
background summary;
details of marketing or alternative offers;
funding evidence;
confirmation of any previous report;
contact details for advisers.
The pack does not need to be perfect, but it should allow the evaluator to understand the transaction quickly.
The earlier this is prepared, the less likely the report is to delay completion.
How long does the report take once information is provided?
At Admin Eval, we typically produce Evaluator Reports within 48 hours of receiving the required information.
Where the matter is urgent, we will work with the purchaser and advisers to understand the timetable and identify what is needed as quickly as possible.
The most common cause of delay is missing or unclear information. Early preparation is therefore the best way to keep the process moving.
How Admin Eval helps
Admin Eval specialises exclusively in independent Evaluator Reports for connected-party sales in administration.
We help by:
explaining what information is needed;
providing a clear information request;
reviewing the proposed transaction;
identifying any gaps early;
liaising with advisers where appropriate;
preparing the Evaluator Report promptly;
keeping the process practical and focused.
We understand that connected-party administration sales are often time-sensitive. Our role is to provide independent scrutiny while helping the process move forward without unnecessary delay.
You can read more about our service on our Evaluator Report services page, or learn more about our experience on the Evaluators page.
Need help preparing for an Evaluator Report?
If you are a connected purchaser, director, solicitor, accountant or adviser involved in a proposed administration sale, we can help you understand what information is needed and how quickly a report can be prepared.
Contact Admin Eval for an initial discussion.
Email: enquiries@admineval.co.ukTelephone: 07824 348338
FAQs
Do we need to have all information before speaking to Admin Eval?
No. It is often better to speak early, even if some information is still being prepared. We can help identify what is needed,what may be missing, and who is likely best placed to provide what we need.
What is the most important information for an Evaluator Report?
The key information usually includes details of the purchaser, the connection, the assets being sold, the purchase price, valuation evidence, the reason for the sale and any previous Evaluator Report.
Can the report be started before administration?
Yes. In many cases, it is critical to begin the process before the administrator is formally appointed, particularly where the sale timetable is urgent. This will be a necessity where the transaction is a pre-pack, which is often the case in our experience.
What if there has been no marketing process?
That does not automatically prevent a report being prepared, but the reasons should be explained clearly. The evaluator will need to understand why the proposed sale is considered reasonable in the circumstances. This is likely to be only in a minority of cases.
Who should send the information?
The connected purchaser is ultimatley responsible for providing the information, often with help from solicitors, accountants, valuers or the proposed administrator. We can guide the parties through what we need and who is generally best placed to provide it.
How quickly can Admin Eval prepare the report?
We typically prepare reports within 48 hours of receiving the required information. If the matter is urgent, please contact us as early as possible.
