Nicola Draper founder Draper Hinks
Did you know that the lock down and Covid 19 has had no effect on income multiples in the market place?
When Draper Hinks shut the office at the end of March 2020 it was expected that post lockdown buyers would be offering both lower income multiples and extended payment terms. The assumption was that there would be a lot of practices haemorrhaging clients and there would be no certainty as to what vendors would actually be selling.
However, since opening the office on the 15th June, not one of the practices we were in the process of selling have had their multiple negotiated down. Deals have been completed through the lock down period and the multiples stayed at market rate. Practices new to the market since the middle of June are attracting multiples commensurate with pre-lockdown rates.
This means that the market place has not been affected. Sellers that wanted to sell at the beginning of the year have had to wait and are now coming forward looking to sell quickly to make up for lost time. There are deals out there to be done.
Here are three case studies of practices we have sold within the last 12 months:-
|Time scale||10 months||Type of Practice||Sole Practitioner|
|Payment||3 tranches||How paid||33.3%, 33.3%, 33.3%|
|Multiple||0.9 x fees||When paid||Comp, 12 & 24 months|
|Offers||2 offers||Office & staff||Office closed and staff transferred|
|Results||Vendor worked hand over, now living abroad.|
|Time scale||9 months||Type of Practice||Sole Practitioner|
|Payment||3 tranches||How paid||40%, 30%, 30%|
|Multiple||0.85 x fees||When paid||Comp, 12 & 24 months|
|Offers||5 offers||Office & staff||Office closed some staff retained|
|Results||Vendor helped with handover then moved to the West Country.|
|Time scale||7 months||Type of Practice||Sole Practitioner|
|Payment||4 tranches||How paid||25%, 25%, 25%, 25%|
|Multiple||0.8 x fees||When paid||Comp, 12 & 24 & 36 months|
|Offers||2 offers||Office & staff||Office closed some staff kept|
|Results||Vendor now happily playing a lot more golf.|
Diane Crawley, Office Manager
|Here are three testimonials from vendors that were happy with the service offered by Draper Hinks in 2019:-|
I heard about Draper Hinks from a marketing email and a Linked In contact. I like methodical systems and there is certainly one in place here – very efficient and very clear. My first impressions were that they were professional and friendly. There was good communication at all times. You should use Draper Hinks because they were discreet and targeted appropriately. The most difficult part of selling my practice was deciding to do it.
Vendor – Adrian Lawrence FAIA Yorkshire
I heard about Draper Hinks from a flyer in the post. The initial contact was positive. They were approachable and seemed to be talking sense. Nicola was practical and communication was good.
Vendor – Mitchell Langhelt FCA Dorset
I heard about Draper Hinks through accountancy colleagues and journals. Nicola was most helpful and made it all seem easy and straight forward. She provided a lot of information. It was a real pleasure to work with Nicola and her staff. It is a very professional and friendly company to work with. You need someone professional and experienced to turn to. The process they follow is excellent and the service was second to none, nothing was too much trouble. Don’t even think about doing it on your own. It is too complex and you need a professional to guide you through the process and get the best price.
Vendor – Linda Cotterill FCA Worcestershire
Practices for Sale
The practices that we had advertised prior to lockdown are still postponed due to the current situation. We will update our website as soon as the vendors advise that they are ready to proceed. However, the practice below is new to the market and available in Tyne & Wear. If you would like more information about this opportunity please contact Diane on firstname.lastname@example.org.
|384/200709||Tyne & Wear||£95,000||Vendor retiring. 2 Full time staff. Premises available to buyer for purchase if required. Fees are portable locally. Buyer must be Chartered or Chartered Certified. Virtual meetings with vendor by arrangement.|
Income Multiples Paid in the last 12 months
|2019||Quarter||Average income multiple paid||Lowest income multiple paid||Highest income multiple paid||Lowest income multiple offered||Highest income multiple offered|
|Quarter 3||Jul – Sep||1.1||1.0||1.2||1.0||1.25|
|Quarter 4||Oct – Dec||0.9125||0.7||1.1||0.65||1.2|
|Quarter 1||Jan – Mar||1.075||0.9||1.25||0.9||1.25|
|Quarter 2||Apr – Jun||1.13||1.0||1.2||1.0||1.20|
Lisa Shenton, Admin Assistant
Contact us if you want to discuss how we can help you buy fees. Please get in touch with Diane Crawley at email@example.com or call her on 01788 816440.