When Asda was acquired in 2021, the transaction was heralded as one of the largest leveraged buyouts in UK history — and the largest retail LBO ever completed in the UK at the time.The enterprise value was approximately £6.8bn, with circa £4bn of debt pushed onto the balance sheet following the acquisition. At first glance, the deal appeared sensible: a high revenue, defensive grocery business with strong historic profitability and scale advantages.However, just a few years later, Asda has become a cautionary case study for deal makers on how leverage, rising interest rates, and unavoidable capex can destroy strategic flexibility.Under Walmart ownership, Asda was not distressed. In the years prior to the transaction: EBITDA was consistently reported above £1bn; Operating profits were strong and stable; Interest costs were modest; Major IT and systems investments were funded centrally. Asda generated meaningful free cashflow and retained the ability to reinvest aggressively when required. Post acquisition, Asda carried approximately £4bn of debt. As interest rates rose, annual interest costs escalated sharply. By 2023–2024: Annual interest expense exceeded £400m; Interest consumed the majority of operating profit; Free cashflow turned structurally negative. In multiple post deal years, Asda generated operating profit yet reported statutory losses after interest.Following separation from Walmart, Asda was required to replace proprietary systems across inventory, forecasting, logistics, and digital platforms. The cost of this transition was approximately £1bn.The rollout was problematic: Forecasting failures; Replenishment breakdowns; Chronic stock shortages; Revenue leakage and customer dissatisfaction.This capex was unavoidable, poorly timed, and layered onto an already leveraged balance sheet. Asda historically competed on value. However: Aldi and Lidl now dominate price leadership and Tesco and Sainsbury’s reinvested heavily in loyalty and data driven pricingAsda became trapped in the middle — unable to undercut discounters or out invest larger incumbents due to balance sheet constraints. Asda did not fail because supermarkets are poor businesses. It struggled because leverage removed strategic optionality at precisely the wrong time.

Hi everyone, Paul here 👋 I joined this group to deepen my understanding of how entrepreneurs use mergers and acquisitions as a strategy to scale businesses beyond traditional growth limits. I’m interested in the systems, structure, and mindset required to build companies that can operate at an 8–9 figure level. Looking forward to learning from the experience in this room and contributing where I can.

Who here is UK based? Always nice to talk to people face to face. First stage is understanding who is local?

Do you need funding for your deals? In the last 7 days we secured £40M ($81M AUD, $51M US) UK: Invoice Finance to fund an LBO £450k Facility No PG, No equity going in (Service fee 0.35%, Interest 4% about BOE BR) Plant & Machinery finance to fund an LBO acquisition £300k Facility No PG, No equity going in (Amortised over 5 years, 7% Interest) Term Debt £250K (Amortised over 4 years, 7% Interest) Real Estate – 2 offers £14M + £18M 1 with a PG, 1 without, no equity going in (Amortised over 8 years, interest only, balloon in year 8 / amortised over 20 years 6.5% Interest) Australia: Invoice Finance to fund an LBO AUD $2M Facility – Limited PG of $500K (6% + BBSW, 0.35% Service fee) Invoice Finance to fund an LBO AUD $8.6M Facility – No PG, no equity (Same terms as above) Term Debt AUD $500K. (Amortised over 4 years, 8%). USA: Equity Investor investing $300K into a deal SBA Loan + Term Debt + ABL Facility combined $2M It is possible to raise capital from financial institutions to fund the acquisition of a well run, profitable business (maybe owned by a baby boomer looking to retire). It is also possible contrary to belief to do it without investing your own capital or signing a PG as evidenced here. Investing your own equity will make the solution cheaper and more flexible but it is not essential. If you have a deal you need funding for with any of the following assets + good cashflow + little existing debt and you are looking to raise a minimum of $500K we can help. Real Estate Aged Receivables (B2B) Plant & Machinery Inventory/Stock (big ticket items only, completed product) Operating in the UK, USA or Australia. Funding for acquisitions only (we can help with working capital funding but only as part of an acquisition not as a standalone). Send me a DM, connect with me.