| Details of the deal for this vendor’s story | |||
| Fees sold | £105,505 | Where | Essex |
| Qualified | FCA | Age | 67 |
| Time scale | 10 months | Type of Practice | Sole Practitioner |
| Payment | 3 payments | How paid | 50%, 25% & 25% |
| Multiple | 0.95 x fees | When paid | Comp, 12 months & 24 months |
| Offers | 4 offers | Office & staff | No office 1 member of staff taken on |
| Results | Vendor helped with hand over for 6 months then retired | ||
This vendor was due to complete the sale of his practice to a buyer who had approached him direct and not through Draper Hinks. It was a very timely approach by the buyer because the vendor had been given notice to leave his premises by his landlord, who was going to sell the property for re-development, so he thought it would be an ideal time to sell and retire. There was plenty of time to carry out the due diligence, arrange for the TUPE of the employee, draw up the contract, get things lined up for the completion date before having to move out of the office.
Why is it when you think everything is going smoothly, it doesn’t always? The buyer suddenly pulled out. No reason given other than “something had cropped up”. This left the vendor in a bit of a pickle. He ended up having to move office at very short notice. It was incredibly stressful for him but he found some serviced offices that could take him and his employee straight away with a three month notice period for both parties. This suited him fine.
He then got in touch with Draper Hinks to explain his situation. We were able to start the marketing of his practice straight away because he had already prepared all the information we needed for the previous buyer. He met with four interested buyers and from there he had four offers. You can imagine he was very happy.
Out of the four offers he accepted one and they moved to due diligence quickly. This is where things started to come unstuck again for the vendor, through no fault of his own. The buyer took between two and three weeks to reply to an email. The process became painfully slow. When the buyer did eventually reply, he always asked for significant amounts of information that were not necessarily relevant to the sale of the practice. This went on for a number of months until such time as the vendor lost patience and trust in the buyer. We had a Zoom call and it was decided that there was no point taking things further with this buyer if there was no trust left. I informed the buyer that the vendor was pulling out.
So, we were back to square one! I suggested that I go back to the three potential buyers that had put in an offer on this practice to see if they would be interested in picking things up with the vendor. One of the buyers was very keen to do so, he was upset he had not been able to secure the deal the first time round but saw it as a great opportunity to acquire fees. We had to confirm that the fees were back on the market because the vendor pulled out and not because of something that the buyer had found in the due diligence process.
The offer still stood at 0.95 x fees. The buyer said he had funding, the staff ready and poised to do the work and was keen to move things along. Both parties fully committed to making it work and finally the contract was signed.
It was a great relief for both the vendor and for us that the deal eventually went through. We were there to pick up the pieces when the vendor was at his lowest. Having been in the field of facilitating the buying and selling of accountancy practices for a couple of decades now, I know things can be difficult but if you keep your eye on the final outcome then it will eventually happen.
Needless to say, the vendor was very grateful in the end and gave us a tremendous testimonial. We do go the extra mile, because it matters to our clients and to us.