Long-term clients of Hill Rogers, Justin and Sally Ferguson, made the decision in 2017 to merge their Sydney real estate business, Ferguson Property with Ray White to create Ray White Ferguson Cammeray.
As is typically the case with business mergers, there were many issues and steps to be managed along the way. To help, Justin turned to Hill Rogers, his trusted business and financial advisers for more than 25 years. Together they worked closely to ensure the merger process was as smooth and successful as possible.
“Selling the business was a big decision for us,” Justin explains. “It was the right thing to do for me and my family, but it was still a lot harder than I first thought. Hill Rogers made the process seamless and no question was too much trouble. They could see things coming, worked out how to foresee issues and dealt with them for me quickly and effectively.”
Know the journey, enjoy the destination
Mergers, by their very nature, are often complex transactions and should not be entered into lightly. With many decades of merger expertise, Hill Rogers’ primary role in Justin’s case was to provide sound management, and strategic and financial advice. However, calling upon our full in-house capabilities, we were also able to offer professional oversight across virtually all compliance affairs relating to the merger. This included:
- Annual reporting & compliance requirements
- Preparation of income tax returns
- Getting his business ready for sale
- Structuring for taxation & asset protection
- Assistance with cash flow summaries and business management via a ‘Virtual CFO’ function
- Tax advice and planning
- CGT on sale and taxation advisory services.
How long does it take?
Every negotiation and transaction is different of course but typically, a business merger such as Justin’s takes an average of 10 months. This includes one month up front to gather the initial information necessary to plot the best subsequent approach and the necessary time to conduct Heads of Agreement/Due diligence. In Justin’s case, the actual merger process itself took seven months to exchange.
Justin’s advice: find the right advisor
Looking back at his own experiences, Justin says there are several big considerations before, and during, the merger process. Beyond finding the right company to merge with in the first place – often far easier said than done – he recommends ensuring your documentation is in order, as your buyer is sure to do their due diligence. But his most important advice is to engage a trusted financial advisor who knows your business, the market and your sector.
“The buyer will have an advisor and you need one too,” Justin explains. “Make sure you invest the time and money to get it right. Although the expense may seem daunting at first, it’s worth every dollar to avoid the cost you’ll spend recovering your mistakes, not to mention the time you’ll save. There are many moving parts and it’s essential to have a partner who understands the negotiations, nuances, legal information and can help you agree on the best price. Personally, it was a huge comfort to have Hill Rogers in my corner, especially when the negotiations became robust.”
Hill Rogers was also able to help Justin minimise tax on the sale of his business, helping him save many thousands of dollars. “They helped me set up solid tax structures when I first opened and have helped me maintain that during our ongoing business operations, right through to the sale,” he said. “One of the specific things they recommended was a family trust, that really helped to minimise my tax.”
Long-term trusted relationships
Partnering with Hill Rogers for more than a quarter of a century now, Justin is well placed to comment on what makes a professional relationship stand the test of time. “Hill Rogers treat their clients like family. Yes, they’re an expert accountancy firm, but above that their business is all about understanding their clients as people, and their family situations. They get it, and they get it right. They take the time to see things coming and provide you with plans for your future that benefit you. They want to know what makes you tick and what they can do to help. They’re not fair-weather accountants, they’re sensitive to your needs and get down in the trenches with you. What more could you want?”
Are you considering a merger? Contact John Wilcox here