With the summer holidays coming up, we thought it would be useful to review 4 recent mergers to highlight the wide variety of deals that get done. With mergers, no one deal is like another and there is no right or wrong way of doing them!
Case Study 1
Our client was a sole practitioner firm in the Thames Valley. Fee income was c£400,000 from the Partner and 2 part time paralegals carrying out typical local work. The firm had provided an excellent income for 20 years but was run as a life style business and now the Partner wished to retire. We undertook a research exercise, looking at local firms who might want to enter the town as well as firms already there with the key element being to assess their staff to make sure that firms we approached had the capacity to come in and take over the clients over a 12 month hand-over period. We quickly found that one firm was particularly well suited and terms were agreed on an earnout basis with the merger going live 4 months after our instruction.
Case Study 2
Our client was a small west end property firm who we had known for a while. They had a particularly strong and loyal client base generating over £1m in fees. Both equity partners were in the mid-50’s and they had begun to worry about eventual succession and the burdens of compliance. Having been together in their own business for a long time it was important that the firm the joined was culturally alike and would allow them to operate as their clients had come to expect. Knowing the London market well, we arranged 3 meetings for them and quickly moved onto agreed heads as full equity partners in a 6 partner firm. Joining in their 50’s means the 2 Partners will have time to enjoy the benefits of the larger firm rather than just joining as a route to retirement.
Case Study 3
Our client was a West Country firm looking to merge with a like-minded London practice. One of the firms that we approached had been approached a number of times over the previous 18 months and felt that a lot of time had been wasted and so they had decided to remain independent. However, after the initial rejection we went back to them to re-sell our clients proposal and they agreed to meet. It quickly became apparent that both firms complemented each other so well that a merger made perfect sense and negotiations ran smoothly to a deal which satisfied everyone.
Case Study 4
Our client is a London firm operating on a fee-share basis with various consultants. We have developed this idea to bring in small firms which they house the firm, provide PII cover and IT, marketing, finance and compliance all for a % of fees generated. The small firm keeps its own identity and brand and we have now placed 6 small firms with this client all of whom have seen income increase and stress decrease as a result.