Why Use an Accountancy Practice Mergers and Acquisitions Broker?

Applying a wealth of experience, acquired over many years in this specialised accountancy practice mergers and acquisitions field, he advises vendors, purchasers and mergees on their options. He will offer the vendor's accountancy practice (or block of fees) for sale on the open market while retaining his anonymity, and hand-hold throughout the selling process. On behalf of purchasers seeking acquisitions, or mergees seeking merger partners, he will approach a large (500+) numbers of firms in the target area and advise respondents on the opportunities available to them. He will assist purchasers and vendors during the accountancy practice mergers and acquisitions process, and merging parties on the benefits and pitfalls, giving guidance throughout. He will advise the parties if he feels they are unsuited and will facilitate a smooth negotiated process where inexperience might cause one to stumble.
An accountancy practice mergers and acquisitions broker is needed whether you are selling, merging, buying, considering joining a Consolidator or want general advice. Formal consultancy advice is needed in areas such as profit enhancement or determining the value of the goodwill.
Selling An Accountancy Practice
The sale of the goodwill of an accounting firm is probably the biggest financial transaction that will ever be undertaken by a principal, the partners or directors. The vendor is understandably concerned that the purchaser may not retain the clients, giving rise to a claim under the claw back clause which could cost the vendor dear. It could be disastrous for the sale to be made to the wrong buyer. A seller needs professional advice with the selection of a short list of suitable buyers. He should have his goodwill valued professionally by an accountancy practice mergers and acquisitions broker. He needs to be certain that his anonymity will be retained throughout the marketing process during which as many firms and individuals as possible are made aware of the opportunity to buy. He must feel confident that neither his staff, clients nor competitors will be made aware of the sale until the vendor can introduce the new owner to them in a controlled manner. He may also want to know the length of time he may be expected to remain after completion. If he is not yet ready to retire, he will want to know if he can sell his business but continue to earn an income stream from it. Or, following the disposal, he may be considering retaining a small block of fees to service from home, but wonders whether a purchaser will allow this if he lives near the business he is selling?
Buying An Accountancy Practice
The purchaser is concerned that many of the clients may not stay, following his acquisition of the fees. There could even be a haemorrhaging of the goodwill leaving insufficient fees to support the fixed costs. Worse still, he may be buying 'Scotch Mist' and the clients may not even exist! A buyer is often unsure what steps to take, pre completion, to limit his vulnerability. Buyers are often unsure what they should look for when carrying out due diligence. It can be confusing trying to understand the rules which govern his actions should the target firm be over staffed when he already runs his own practice with staff he wishes to retain. A frequent concern stems from the fear that the vendor will start up in business again, locally. He may have great concern that if clients don't stay with him, how he can make a claim under the claw back clause. He could be faced with lots of hassle from the previous owner if he doesn't accept the loss was legitimately incurred. Most purchasers wonder what redress, if any, they have if a client stays for 12 months then leaves.
Accountancy Practice Mergers
Accountancy practice mergers take place for a variety of reasons, i.e. to increase the overall profits by achieving an economy of scale; to create a bigger critical mass, thus enabling a more structured workforce to be put in place; to dilute the amount of practice administration per partner or, in some cases, to transfer the practice administration from one partner; to enable the partners to 'play to their strengths', etc. It often provides a logical solution to the problems of succession.
A merger does not automatically imply that the mergees own equal equity, or that they earn equal profits from the larger firm. However, if the profit share is not equal, neither will be the responsibility for any losses! It is frequently the case that an adjustment is made to ensure that all the partners in the new concern own equal amounts of goodwill (and voting rights).
An accountancy practice mergers and acquisitions broker is able to find suitable merging partners either at local, regional or national level. The parties are reviewed, valued and then the broker will assist in setting up the new firms structure. The key considerations are:
- How to decide the best strategic fit.
- How to locate potential partner firms.
- How to value the parties.
- How to keep focused and stop the detail throwing it off course.
- How to keep the legal and administrative processes moving forward.