Advisers and accountants may need to rethink M&A plans

From

Paul Barrett

The accounting and financial advice industry is awash with buying opportunities and cashed-up buyers are in poll position to snag quality assets with the institutions out of the running, according to a new paper by AZ Next Generation Advisory (AZ NGA).

Build or buy: A guide to merger & acquisition fundamentals, the second paper in a series on Mergers & Acquisitions by AZ NGA, examines the three fundamental reasons why businesses and investors participate in M&A.

Based on AZ NGA’s experience completing almost 80 accounting and financial planning transactions in six years, it aims to help small to medium-sized enterprises (SMEs) understand the types of transactions currently taking place, determine if M&A is the right strategy for them and, if so, position their businesses to extract maximum value from a deal.

According to Paul Barrett, AZ NGA Chief Executive Officer and author of Build or buy, competition for quality assets is heating up and will only intensify in the lead up to 1 January 2026, however, M&A is not the right strategy for everyone and ill-considered deals usually result in disruption, increased cost and complexity, and value destruction.

“M&A is an important tool for business growth and in the next three years many advisers will be tempted to do a deal but just because you can, doesn’t mean you should,” he said.

“This paper challenges readers to rethink their M&A plans, objectively assess their ability and capacity to do a deal, and recognise the important role of organic growth in any successful business.”

“For those who are determined to go down the M&A path, it also provides insights and practical tips for bedding down an acquisition.”

Build or buy follows AZ NGA’s 2019 paper: Deal or No Deal – A guide to merger and acquisition success, which focused on the task of buying and selling businesses including how to identify and value a good opportunity, conduct due diligence and negotiate price and terms.

While Deal or No Deal touched on the importance of buyers and sellers having the right motives, it assumed that doing a deal was a fait accompli, Barrett said.

“Upon reflection, Build or buy should have come first because the majority of accounting and advisory SMEs are not set up to do a deal and a pure organic growth strategy is likely to deliver better results,” he said.

Since 2015, AZ NGA has completed 79 transactions including the recent acquisitions of Queensland-based businesses, Blue Harbour Financial Partners (formerly Bridges Brisbane Bayside) and Henderson Matusch.

Backed by European investment firm, Azimut Group, AZ NGA’s three pronged strategy is to acquire high quality, specialist accounting and advisory SMEs; build, buy or partner to deliver a range of SME services; and support businesses to drive organic growth.

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