Acquiring a New Accountancy Practice With Ambitious £350,000 Finance Package

Unfortunately, that buyout would cost around £350,000 – a large amount of money that few businesses have ready access to. The accountancy firm, despite its success, did not have access to such a high amount of working capital. Therefore, they needed to seek investment from finance providers. 

How could they secure a deal quickly to capitalize on the competitor’s position and supercharge their growth? They realised that they needed the support of finance experts, so they approached the team here at Rangewell… 

Why was there a problem?

The three-partner firm had a clear challenge around simply being able to raise the cash required to buy their competitor’s practice. The cost came as a result of standard market valuations, which analyse the total gross recurring fees of the selling firm. The accountant firm who sought to buy were already specialists in construction, while the selling firm had clients in the haulage and logistics sectors – so there was a clear business case for the purchase with beneficial cross-share.

The buying firm’s team were young and ambitious but lacked the specialist knowledge required to approach lenders in the finance world. They needed an agreement that could help them secure the purchase, but we were also able to help them mitigate the risk of the selling firm’s actions post-sale.

Why we were able to help

When a buyout occurs, the buying firm needs some form of security to protect itself. If the selling firm was to simply ‘give up’ following their buyout, the buyer is left with very little. Instead, we helped the buyers negotiate a deferred consideration agreement. This protected the buyer and meant the seller had to continue investing effort into the joined business they’d now become part of. 

Whenever accountants look for a buy-out, all the buyer is ultimately purchasing is a list of clients. The service-based nature of the business means the value is often in employees and relationships, so it’s crucial your finance agreement considers this and helps mitigate risk. 

Rangewell has vast experience in the accountancy sector, which meant our team could quickly spot this risk and manage it for the buyer. We helped negotiate the right agreement and secured three full offers from banks, two of which could complete in just two months – perfect for the speed required during buyouts.

Ultimately, the buyer chose an offer with a partial guarantee so they could share the purchase between full-time partner owners and part-time owners. 

About accountancy and professional services finance

Rangewell knows the accountancy sector inside and out, so we’re able to quickly arrange the right conversations with the lenders who are going to be able to offer deals that meet your timelines. In a buy-out scenario, where timing is crucial, we’re able to cut through the noise and get the right agreement in place. 

If you’re considering a buyout and want to see how you can raise the finance required, you’ll need lenders that understand your sector and can help you mitigate risk. 

Rangewell helps you achieve your buyout goals

Our team’s expertise in accountancy and professional services as a whole means we’re well-positioned to quickly understand your business, the prospective purchase and your plan for growth. We’ll help you turn this into a strong finance application, and then approach the right lenders to secure the finance you need. 

Contact us now if you’d like to discuss finance for accountancy firms. We offer a no-obligation chat that will help you better understand the lender’s market.