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International Expansion leads to Cashflow Crisis
Bounce Foods, established in 2004 by Andy and Paula Hannagan, grew from a home garage operation into a multi-channel brand with a portfolio across grocery, convenience, pharmacy, health and online. Between 2012 and 2016 Bounce Foods expanded internationally, particularly in the US, UK, and Canada, leading to financial strain and a cashflow crisis in 2023.
Despite strong sales in Australia, Bounce Foods suffered from poor financial control after retracting from overseas markets.
The crisis in June/July 2023 was worsened by a historical mismatch of payment terms with employees/suppliers and customers, leading to reliance on debtor finance secured against the directors' family home.
In July 2023, Grant Thornton was appointed as voluntary administrators to salvage the business and the family home. An urgent sale campaign was launched, including brand and asset sales. The process attracted significant interest, leading to 130 enquiries and several offers.
Grant Thornton negotiated over stock liens, secured key recipes, and managed financial and non-financial data for the sale
The company's intellectual property and stock were sold to a major Australian company with global presence, a rare achievement in business administration sales. The sale prevented the forced sale of the directors' home and ensured repayment to the major bank. After the sale, the founders were retained post-sale, providing them with a steady income.
The success of this transaction led to Grant Thornton being appointed as external administrator to sell the business and assets of Nourish foods within one month after settling the sale of the Bounce transaction.
John is a registered liquidator, chartered accountant and member of the Australian Restructuring Insolvency & Turnaround Association and brings over 20 years’ corporate insolvency, restructuring and advisory experience to the Grant Thornton team.
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It is important for business owners facing financial distress to understand all the options available to them. Small Business Restructuring (SBR) offers a pathway for small and medium sized Australian companies experiencing financial pressure to deal with unmanageable debt, reset operations, and continue trading through and beyond difficult times. SBRs are also a cost-effective solution to save a business compared to a liquidation shut down.
The Full Federal Court has handed down its decision in AusNet Services Limited v Commissioner of Taxation. AusNet argued that its 2015 restructure did not qualify for rollover relief under Division 615, despite that it earlier said it did. This case serves as a reminder that once a tax election is made, it is very difficult to unwind. Careful planning and forecasting are critical.
