Assynt Corporate Finance, a member of The Corporate Finance Network in Hertfordshire, has advised an Accountancy & Tax practice on its sale to a larger firm.

Andrew Watkin (pictured), a business adviser at Assynt Corporate Finance was asked by the Director to undertake a search of practices using Xero and Receipt Bank software for their clients. He undertook the research in the local geographical area looking for the type of practice that used these products and might be interested in the acquisition which was a genuine retirement sale.

A mailing of the flyer to 73 individuals Partners and Directors (some of whom were at the same firm) was sent out by snail mail with a Fact Sheet and covering letter addressed to the individual at the potential acquirer.

Six parties expressed an interest and signed confidentiality agreements. These were shortlisted to four. Using the Zoom conferencing facility, interviews were undertaken and a stand-out party of one was selected to progress further. Meetings were held between the principals. Heads of Agreement were negotiated and an Integration Plan devised between the Principles.

The advantage in undertaking the research was to provide the director, who wished to move to a new career, knew all the interested parties in the local area were approached and all the opportunities had been approached.

The Zoom

calls enabled the director to assess the acquirers and judge who would be best suited to take on the clients and provide, in the future, the service and resources they required.

In particular, Andrew attended and contributed to meetings with the purchaser. He explained the nature of and the risks to the seller and negotiated the financial aspects of the transaction including the multiple of recurring fees, the clawback amount, and the period. The integration of the two businesses was vital to protect the interests of the seller and, on Andrew’s insistence; the parties looked at this during negotiations such that the nature of the transaction did change from that originally anticipated.

Andrew drafted a detailed Heads of Agreement which helped during the drafting of the SPA where the buyer’s solicitor had excluded certain points in the SPA despite these having been agreed by the parties.

The disposal was completed on 1st February 2021 with the sale of the entire share capital of the Practice.

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Categories: Deals


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