| Details of the deal for this vendor’s story | |||
| Fees sold | £107,000 | Where | Suffolk |
| Qualified | ACA | Age | 68 |
| Time scale | 2 months | Type of Practice | Sole Practitioner |
| Payment | Lump sum, earn out | How paid | Lump sum on comp then 33% paid quarterly from fees received for 3 years |
| Multiple | 1 x fees | When paid | £20k at comp, then per quarter in arrears |
| Offers | 2 offers | Office & staff | No office and no staff |
| Results | Vendor recovering from ill health due to stress of running his practice | ||
We first heard from this vendor in 2020 when he let us know that he was thinking about his future retirement, but he did not want to do anything at that point. He had received our Newsletters for some time and knew he wanted to deal with Draper Hinks when he was ready to sell.
The next time we heard from him was in February 2024 informing us that he had had a stroke and was finding work very difficult. He had been signed off by his GP, who had told him he should rest and not do anything stressful. As a sole practitioner with no staff this was not going to be possible. He knew which jobs had to be done in February, but he had been in hospital and was missing deadlines by the day. The situation was getting desperate. His vision was badly impaired and he could neither type on his keyboard nor use a calculator. Furthermore, his driving licence had been taken away so he could not go out and visit clients. As you can imagine his stress levels were sky high.
The first thing we did was contact a local accountant who agreed to do some of the pressing work. This was done on a subcontract basis case by case. The immediate problem was eased but this was not a long-term solution.
We sent him our paperwork to complete and said we would work with whatever information he was able to give us. His daughter, who is not an accountant, helped to fill in the questionnaire with him dictating a lot of the information he kept in his head, such as what accounting systems he used and whether or not he had had any PI claims etc. Speed rather than completeness was our priority.
We sent out our mailer to potential buyers. The local accountant, that had been helping out, was interested in taking things further and we had one other interested party. By this time the vendor was trying to get fit, but his eyesight had only improved a fraction. He was also having difficulty holding a pen and writing. Although his condition had not deteriorated any further, he was still unable to see properly to do any work.
Both buyers met with the vendor, on an individual basis, to discuss buying his practice. The local accountant, that had helped in the past, put in a very low offer. The other firm of accountants had more than one office, had bought before through Draper Hinks, had funding in place, a team ready to work with the vendor’s clients and knew enough about buying fees that they could minimise the time for the negotiations.
After the first meeting with the vendor the larger firm said that the vendor had some very attractive clients and that he dealt with matters in a similar way to how they ran their practice which would help with the continuity of care. They put forward an offer very quickly that was market rate. They confirmed that they would not take advantage of the situation and said it was against their ethos to offer anything lower. The vendor’s daughter had helped to put together a handwritten list of clients which were then transferred to a spreadsheet. There was a very light touch for the due diligence in view of the speed needed for the transaction to complete.
No lawyers were involved in the transaction, which helped to speed up the process. The buyer had a contract they had used before. The vendor liked the buyer because he was down to earth, they had a lot in common. They decided between them which clients would have a joint visit and which clients would have a video call.
At this point the vendor’s health started to deteriorate. His GP told him to stop immediately! However, the vendor continued to help the buyer with the handover. He was determined to do his best for his clients. Money was always a secondary consideration. The vendor was very impressed with the buyer being able to complete the deal in under 2 months. The vendor’s stress level dropped significantly allowing him to relax and concentrate on getting better. Although, his eyesight was still a worry, he was now able to walk five miles a day.
He thanked us saying we helped immensely and he didn’t think it could have gone better. He was happy that his former clients were in great hands, but he was not looking forward to saying goodbye to the many clients that he had known for so many years, some for over 40 years.
We are so happy that the vendor is now well enough and able enough to sort out and listen to his collection of over 7,000 records and CD’s. Result!