A merger of the two accounting firms enabling both of them to realise their goals
Taking a step back from the business after a long and successful career is a different kind of challenge. Although these two agendas seem conflicting at first glance, they can in fact complement each other perfectly.
This was proven by a successful merger between two Bath-based accountancy firms, Advance Business Consultants and Richardson Swift.
RWK Goodman acted for Advance Business Consultants and worked on the deal closely with managing director David Chasemore. David’s main goal in the transaction was to be able to scale down his workload and focus on other projects while ensuring that his business continued successfully and his clients continued to receive the same standards of service. A merger with Richardson Swift, a firm with a similar business ethic, looked like the perfect solution from the start.
David instructed the Corporate team at RWK Goodman, who have a track record of successfully representing accountancy practices in M&A transactions. RWK Goodman Partner Alex Pyatt took an active part in negotiations, working out the fine details of the deal. The contracts were drafted with any possible risks in mind, protecting David’s interests both by amending the contract so that it properly reflected the deal he had agreed and by limiting his liability under the inevitable warranties contained within the agreement.
Traditionally mergers between accountancy practices are based on the “recurring fees” model. The deal is done on the basis that those clients who instruct the firm post completion will be happy to use the buyer after completion. If any clients are “lost” the buyer will usually expect the right to reduce the purchase price and receive a repayment of part of the price from the seller.
It’s important to protect the seller’s interests in this situation. For example, should the buyer suffer in this way if a client is lost because the buyer increased their fees unreasonably or if the buyer simply didn’t do a good job in servicing that client.
The end result of the merger was the 18-strong firm which provides full audit and accounting services. David Chasemore, who had been able to step back having made sure his clients would be taken care of, said, “The merger enables me to have more time off whilst maintaining excellent client service”.