Accountancy Practice Acquisition for a Sole Practitioner
£290,000 · 7 years · 7.25% fixed. A sole practitioner accountant wanted to acquire a retiring colleague's practice - 180 clients with a fee income of £320,000 per annum.
The Client
Sole practitioner accountant
The Challenge
A sole practitioner accountant wanted to acquire a retiring colleague's practice - 180 clients with a fee income of £320,000 per annum. The acquisition would triple her own practice's fee income overnight. The risk was client attrition post-acquisition - a standard concern for professional practice lenders.
Our Solution
Doulton arranged professional practice acquisition finance with an earn-out clause built into the loan structure - the loan amount was partly contingent on client retention in the first twelve months, providing the lender with protection against attrition. The seller agreed to a six-month handover period to facilitate introductions.
The Outcome
Acquisition completed. Client retention at twelve months: 88% - above the 80% threshold used in the lending assessment. Combined practice now billing £580,000 per annum. Loan repayments comfortably met from fee income. Key highlights: Earn-out clause protected lender against client attrition risk; Seller agreed 6-month handover - client retention maximised; 88% client retention at 12 months - above 80% lending threshold.
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