|This is a case study from a practice we sold in 2022:-|
|Qualified||FCA, FCA & FCCA||Age||65,62,48|
|Time scale||8 months||Type of Practice||3 Partners|
|Payment||3 Tranches||How paid||A third, a third, a third|
|Multiple||0.9 x fees||When paid||Completion, 12 months and 24 months|
|Offers||3 offers||Office & staff||Office shut – staff moved to new office|
|Results||1 Partner left after 6 months, one leaving after 2 years and one to remain full time ongoing.|
On 20th May 2021, I was asked to be a Keynote speaker for the ICAEW. The topic was ‘Exiting from Practice’, for members in Practice thinking about selling their firm. One of the attendees on this webinar approached me at Draper Hinks a few weeks afterwards and asked me to sell their practice.
This is their case study.
There were three partners in the practice. One was aged 65 and wanted to leave as soon as possible; the second was aged 62 and wanted to work for a couple of years before retiring; the third was aged 48 and had no foreseeable plans to retire at all. So, three people wanting very different outcomes from the sale of their practice. It is not unusual for us to come across scenarios whereby partners or directors of a firm want different things from the sale of their practice. We can and do accommodate all requests and requirements.
They had approached me because they knew they needed to do something. The office where they were based had been sold at auction. They could not afford to buy it. They were given notice to vacate the premises within the next 9 months. This was not an easy task to do because they had a number of staff that also needed to be re-homed. We had a fixed end date that could not be moved.
9 months may sound like a long time to find a buyer and complete on the deal, but we were up against the clock. We had a deadline to meet.
We asked the vendors to fill in a very comprehensive questionnaire, giving us full information about their practice and then we started the process of marketing their fees. This entailed contacting potential buyers individually and advertising it on our website. The buyer had to be audit registered so that narrowed down the field quite significantly.
We had a number of enquiries from potential buyers. We always ensure that the buyers sign a confidentiality agreement, which is in our terms and conditions, before any information is given to them. We booked meetings with three interested buyers. These meetings were held at a neutral venue, i.e. in a hotel meeting room, where there was plenty of parking. The purpose of these meetings was to look for synergies and similarities of working practices. After these meetings the vendors were happy to meet with all the buyers again.
We then organised a second meeting between the interested buyers and the vendors. These meetings were at the premises of the buyers. The purpose of this next meeting was for the vendors to understand the systems and processes of each of the buyers, meet the staff, and look at the office they and their staff could possibly be moving to. After each of these meetings the vendors were happy to have another meeting with each of the buyers.
We then organised a third meeting between each party where the buyers were invited, on different days, to come and have a look around the vendor’s office. This was done evenings and weekends when there were no staff present. It was then that we asked the buyers to put forward an indicative offer. Three offers were received. The vendors chose one offer. The buyer was invited to do due diligence and then the deal proceeded to completion within 8 months of us receiving the instruction to sell the practice. We got a lovely testimonial from the vendors thanking us for all our hard work.