Connect Financial Service Brokers founder Paul Tynan noted there is a growing market of overseas buyers for Australian accounting firms, and that there are more domestic buyers in the market than sellers.
As a result, mature accounting practices are continuing to defer their sales under the “erroneous expectation” that they’ll attract a higher selling price.
The particularly active buyers are not taking an indiscriminate approach to acquisition, rather, they are interested in modern practices with efficient operational frameworks.
Therefore firms that are lacking on the technology and processes front, and delay sale without adjusting their systems and procedures, are operating under the false hope that waiting will increase their purchase price.
“These groups have been observing the local market for a number of years and are now implementing their strategies,” said Mr Tynan.
“However, the key acquisition requisite is sound, successful business models with modern, efficient operational frameworks.
“It is the quality end businesses that are attracting the attention of prospective buyers.”
Mr Tynan said in his experience, the traditional accounting partnership equity model has broken down and is “no longer able to support mature age partners to exit and retire.”
“Primarily, young industry entrants are preferring not take on more debt and have no confidence in the capacity of the business to address the challenges of the changing accounting landscape,” he said.