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Move into a company which is restructuring?

Does anyone have experience of joining industry into a subsidiary which is divesting?

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Hi everyone,

I was wondering if anyone has moved from practice into a business which is part of large plc and being divested? I am considering an opportunity but wanted to know if there are any red flags due to company being marketed for sale. However the position that is being offered is post restructuring.

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By JoF
22nd Oct 2019 09:01

As in the way you describe,red flag would be that you will have no employment rights so won't be transferred under any TUPE regs.

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By paul.benny
22nd Oct 2019 11:35

Not quite sure that's right.

Whenever you join an employer, you have certain rights from day 1 (eg protection from discrimination). Whether or not TUPE is even relevant depends on whether it's a share sale (no change to the employer) - or a trade and assets sale (all employees at date of sale are protected by TUPE).

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By JoF
22nd Oct 2019 12:29

Apologies - my error.

Certainly shouldve been less vague on point 1.

Thanks for putting me straight.

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By B Roberts
22nd Oct 2019 15:40

paul.benny wrote:

Not quite sure that's right.

Whenever you join an employer, you have certain rights from day 1 (eg protection from discrimination). Whether or not TUPE is even relevant depends on whether it's a share sale (no change to the employer) - or a trade and assets sale (all employees at date of sale are protected by TUPE).

The pragmatic situation is that with less than 2 years service an employer can simply say sorry, it isn't working out and let you go.

If you think that this is as a direct result of a protected characteristic then this is another matter

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By bernard michael
22nd Oct 2019 09:47

Job & Income security are immediate concerns that require evaluation
Has the divested company sufficient resources and experienced senior management to cope away from a group ??

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Hallerud at Easter
By DJKL
22nd Oct 2019 10:15

Depends who is acquiring, finances/balance sheet of the company departing group and resources of company /its purchasers post that event.

Some understanding as to why this might all be happening might also be useful.

Whilst no recent relevant experience I did, years ago ,work on an audit of a part of what was then Comet Group (Part of Woolworths), year one audit the particular company was still part of the group, year two it had experienced its MBO, whilst I did not carry on with that firm and that audit I did spot in the papers it going into liquidation a few years later; in essence it took on too much debt and was vulnerable to the economic turmoils of the early 1990s.

Having said the above I first jumped from practice in 1990 at age 30 into a clothes retailer, I had 4 years with it running the finance function and although it got struck down by the early 1990s slowdown it was really good experience, running the whole finance function of a company (albeit small,10 shops/50 staff) in my opinion made me a far better accountant when I did later return to practice, I had much more insight into how a business actually operates as practice can often be more a measuring exercise.

Frankly if young enough to recover if it all goes pear shaped "Who Dares Wins" springs to mind though I would do a bit of reading and research about them first.

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By Accountant A
22nd Oct 2019 11:23

Depends on how confident and competent you are. Do you like working with the uncertainty that this kind of situation will involve? Some people love the "buzz", others hate it.

It could be the opportunity of a lifetime - or it could be a disaster. You've said nothing about the opportunity - whether it's a senior post in a large department or a 'one man band' position.

There could be plenty of learning opportunities and potentially some good CV enhancing experience.

If you are happy that you have a decent fall back position if it doesn't work out, got to be worth exploring.

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By paul.benny
22nd Oct 2019 11:50

Experience suggests that the finance function of business for sale is fairly integrated into the wider group - shared systems, shared service centres, etc for accounting and other back office functions. It sounds like the vendor has identified a need for resource to achieve the separation and for the business post-sale.

This will be a bumpy ride for you. Expect to have to get involved in systems and process change, to have lots of uncertainty. This in turn will disrupt the morale of those around you, which can make it an uncomfortable place at times.

One of the challenges that you will have coming out of practice is that you've never had the discipline and routine of preparing monthly reporting, forecasting, cash management. It's very different when you actually have to do all of this stuff for yourself.

For job security - depends somewhat on the buyer. Trade buyers are more likely to have their own functions and dispense with people in the acquired business but even that takes time.

Are there any red flags? No, but there are yellow ones: this isn't an environment for everyone. You might thrive or you might hate it. I worked with a business that had hired a recently qualified from a Big4 firm just before divestment. It wasn't for him and he chose to move on within a year.

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By bernard michael
22nd Oct 2019 12:19

I'm concerned for you
Do you have any experience of this type of operation ? If not why are they choosing you to lead a different venture forward.?
Something is missing in the telling of this eg are you investing in it ?

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Hallerud at Easter
By DJKL
22nd Oct 2019 13:04

Not sure the OP says lead, merely join.

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By Clinton Lee
22nd Oct 2019 13:05

Large Plcs divest a core division for a range of reasons. It could be some "blue sky" thinking strategic plan to re-balance Group risk and use the capital released to make acquisitions elsewhere...or something.

But it's generally because the division isn't performing well (or well enough).

As such, it's a higher risk proposition for you and the compensation should reflect that.

TUPE is irrelevant. As already pointed out it's only applicable where there's a sale of assets, not shares. Further, even if you do sign up prior to the diversification AND the transaction is a sale of assets, you still can't be sure of TUPE cover. They'd probably be safe for dismissing a new hire under the ETO (economical, technical or organisational reasons) provisions of TUPE.

Are you in a position to form your own assessment of the strength of the division and its ability to operate independent of the parent? Probably not, not unless you're an integral part of the DD team.

It's a leap in the dark for you but could also be an opportunity to jump a couple of steps up the career ladder.

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