How to buy a company out of administration (UK)
The nine-step playbook UK buyers actually use — from IP outreach to same-day completion. Follow the sequence, hit each gate, and you'll complete in 2–6 weeks.
Send a one-page buyer profile to every UK IP firm active in your sector — Interpath, FRP, Begbies Traynor, Teneo, Kroll, Leonard Curtis, Quantuma. State sector, ticket size, geographic scope and proof-of-funds source. IP business-development teams keep live registers and match buyers to opportunities before Gazette publication.
Watch the London Gazette daily. Sell Ltd's live UK Administration Monitor at /administrations aggregates every notice with sector, region and appointed-IP filters. React the same day — the shortlist forms in 48 hours.
First contact must include (a) sector fit statement, (b) indicative ticket, (c) a funding letter (bank offer, ABL indicative term sheet, HNW solicitor undertaking or PE mandate). Administrators will not release data-room access without this.
The nine steps in detail
- Step 1Register with insolvency practitioners
Send a one-page buyer profile to every UK IP firm active in your sector — Interpath, FRP, Begbies Traynor, Teneo, Kroll, Leonard Curtis, Quantuma. State sector, ticket size, geographic scope and proof-of-funds source. IP business-development teams keep live registers and match buyers to opportunities before Gazette publication.
- Step 2Monitor live opportunities
Watch the London Gazette daily. Sell Ltd's live UK Administration Monitor at /administrations aggregates every notice with sector, region and appointed-IP filters. React the same day — the shortlist forms in 48 hours.
- Step 3Approach with proof of funds
First contact must include (a) sector fit statement, (b) indicative ticket, (c) a funding letter (bank offer, ABL indicative term sheet, HNW solicitor undertaking or PE mandate). Administrators will not release data-room access without this.
- Step 4Sign the NDA, access the data room
Standard IP NDA is 2–3 pages, non-negotiable. Data rooms typically contain: latest management accounts, aged debtor/creditor lists, employee schedule, key contracts, IP register, plant list, TUPE-liability estimate, and a bidder Q&A log.
- Step 5Run 72-hour due diligence
Prioritise (i) TUPE headcount and payroll cost, (ii) key customer/supplier contracts and change-of-control clauses, (iii) landlord consents, (iv) IP registrations and domains, (v) working capital and cash burn. See our full distressed DD checklist.
- Step 6Submit an SIP-defensible offer letter
Structure: purchase price broken down by asset class (goodwill, stock, plant, IP, debtors), timing (usually 5 working days to completion), conditions (typically zero — this is a clean cash deal), funding evidence attached, TUPE liability acknowledged.
- Step 7Negotiate the Asset Purchase Agreement
Distressed APAs are 20–40 pages with minimal warranties and no indemnities from the seller (the insolvent company). The administrator personally excludes liability. Buyer-side solicitors focus on schedules — asset lists, employee list, IP list, contracts to be assigned.
- Step 8Deposit and exchange
Administrators often require a 10% non-refundable deposit on exchange, or exchange and completion the same day. Solicitors' undertakings usually hold funds.
- Step 9Complete in cleared funds
On completion day: buyer's solicitor sends TT for the balance; administrator releases assets, IP transfers, employee list, keys and IT admin credentials. Post-completion: TUPE consultation, supplier reset, and communication to customers.
Related on the buyer hub
Frequently asked questions
How to buy a company out of administration in the UK?
Register with UK insolvency practitioners, monitor Gazette notices and the Sell Ltd Administration Monitor, sign an NDA to access the data room, run 72-hour DD, submit an offer letter with proof of funds, negotiate the APA, and exchange/complete in cleared funds — usually within 2–6 weeks of first contact.
Do I need a broker?
No — buyers deal directly with the administrator. Larger deals may involve a buy-side adviser for financing and DD coordination, but administrators strongly prefer direct principal-to-IP contact so they can gauge decisiveness and funding certainty.
What paperwork will I sign?
An NDA to access the data room; an Asset Purchase Agreement (APA) on completion; TUPE employee liability information (ELI) exchange; assignments or novations of specific contracts and leases; and occasionally an escrow/holdback agreement.
Can I make an offer before administration?
Yes. If directors introduce you to their IP adviser pre-appointment, the deal can be structured as a pre-pack — exchanged the moment the administrator is appointed. See pre-pack sales — for the buyer.
How competitive is the process?
Trade sales in decent sectors attract 3–10 bidders. Pre-packs are less competitive because the marketing is compressed. Distressed retail and hospitality often see just 1–2 serious offers.
Do I need FCA/regulatory approvals?
Only for regulated firms (FCA-authorised, gambling, care homes, energy supply, etc.). For most trading SMEs there is no external regulatory consent — you just need Companies House filings post-completion.
What happens if my offer isn't accepted?
The administrator will normally tell you the successful bidder's price band. Ask to be underbidder — if the winner fails to complete (~10% do), the administrator returns to your offer within days.
Can I offer non-cash consideration?
In practice, no. Administrators need cash to distribute to secured, preferential and unsecured creditors. Deferred consideration is only accepted for a portion when secured by bank guarantee or personal guarantee.
How do I handle staff on day one?
TUPE regulation 13 requires employee consultation. In practice, distressed sales use the 'micro-business' exception (reg 13A) where possible, and the administrator handles pre-completion notification. Buyers should have a day-one town hall ready.
What's the biggest mistake buyers make?
Underestimating TUPE cost and working capital burn. Buyers focus on the headline price and forget they are also inheriting a payroll that pays out mid-month, VAT registration, and supplier pro-forma terms for the first 60–90 days.