Countplus yesterday announced to the Australian Securities Exchange (ASX) they will expand their acquisition model, through the possible listing of a part-ownership vehicle, known internally as "C+2" within the next few years.
Countplus chairman Barry Lambert told InvestorDaily the part-ownership model is the future of acquisitions and succession planning in the accounting space. The move is part of a plan to acquire firms similar to accounting and advice business Hood Sweeney, in which the company has held a 25 per cent share since October, he added.
"There was a demand from the bigger players for a part-ownership model and we just think that there is a lot of potential there," he said.
"They need a minimum profit upon listing of $2 million and preferably higher, so it's going to be targeting the bigger firms," he said.
Principals of accounting firms acquired under C+2 will retain direct ownership of 40 to 49 per cent of their business after listing, and retain management control.
Mr Lambert said that the C+2 model reduces the risk for Countplus when acquiring practices and also assists the accounting industry with the succession process.
"When one partner wants to retire, if there are 60 per cent less shares to sell, then it's 60 per cent cheaper for a young person to buy into an accounting firm," Mr Lambert said.
"[We] can assist them with their succession and the ability to be able to make it easier for new principles to buy in and therefore, when a business sells to a new principal, they don't have to pay as much to become a principal."
While C+2 will be focused on the part ownership of larger accounting firms, Countplus will continue to acquire 100 per cent of smaller firms as "tuck-ins".
"Countplus will continue as normal and most of its acquisitions have been tuck-ins, smaller firms and sole practitioners looking to retire," Mr Lambert said.
"There may also be some stand-alone acquisitions where firms prefer to go into Countplus instead of C+2, but a lot of people are going to like the part-ownership model."
