Accuracy wants to become ‘the McKinsey’ of the advisory world

14 November 2013 Consultancy.uk

Ever since Accuracy's founding, a specialized advisory firm in the field of financial advisory, merges and acquisition, it has shown to grow impressively. In less than ten years of time, this company has grown from scratch to a player with 240 advisors and offices in 9 countries. It has a turnover value of more than €50 million. In a recent interview with French media, CEO Frédérique Duponchel lets it be known the advisory firm has ambitious plans for growth in the upcoming years. “It is our ambition to become the McKinsey of the M&A advisory world.”

Accuracy was founded in 2004 by a group of ex-employees of Arthur Andersen in France. As a consequence of the convergence between audit- and advisory service, the founders opined that there should be a player in the field of merges, acquisitions and transaction services. From their headquarters in Paris, the footprint of the advisory firm grew quickly. By the year 2006, Accuracy opened its first international office in Madrid. In June 2007, the founding of Accuracy in the Netherlands followed.

Accuracy Timeline

In the year 2008, Accuracy opened an office in Milan. A year later, offices followed in Brussels and Frankfurt, in 2012 London was added to this footprint. In mid-2011, offices were opened in München, Rome and Canada. By the beginning of 2012, the first establishment in Asia followed, just outside the city center of Indian capitol New Delhi.

The fast growth and internationalization of Accuracy caused, against all odds during the crisis, turnover to grow spectacularly. 40% of the turnover is accounted for by M&A works, 30% by forensics and litigation and the remainder aliquot by financial advisory assignments. An overview:

Accuracy Omzetontwikkeling

According to Frédérique Duponchel, co-founder and CEO of Accuracy, the organization primarily thanks its growth to their distinguishing business model. Their approach relies on independency; Duponchel states that this is the key criterion for making sure customers receive ''excellent delivery''. This is what distinguishes Accuracy from, for instance, the Big 4 and other multi-disciplinary advisory firms. Accuracy has its roots in one Big 4 office. Above all, a large part of Accuracy’s consultants have a background at one of the international acoountants- and advisory firms.  For instance, Accuracy's Managing Partner in the Netherlands, Leontine Koens-Betz, has worked at KPMG. Also, during the past year multiple advisors with a Big 4 background were attracted (i.e. Bas van Helden at KPMG; ex-KPMG and Gijs Siecker; ex-KPMG).

Looking ahead in time, Duponchel is downright concerning his ambitious goals. For this year he foresees a record breaking turnover of approximate €50 million. This thanks to an improving M&A market. ''There are signs of strong recovery in the market. Organizations expect more assistance in the field of financial advisor. All our signals are on green for the coming months''. In the long-term, ambition is probably more challenging: ''It is our ambition to become the McKinsey in the M&A advisory world'' says Duponchel, referring to the strategic advisory firm McKinsey & Company**. This organization has been on top of the strategic advisory market’s list for years.

Accuracy logo

Pitfall

Hopefully Accuracy does not make the same mistake as another French branche associate: Investance. After their founding in 2001, also in Paris, Investance grew exponentially  with an annual growth of at least 45% between 2001 and 2013. However, their ambitious plans have proven to be too ambitious, and under the economic crisis and rising costs, the global organization had to divide its business. By February this year, the whole international network was taken over by Sia-Partners.

* Based on multiple interviews with French Media between 2009 and 2013.

** With 17,000 employees in over 60 countries and a global turnover of approximate €5.25 trillion, McKinsey & Company is the worldwide market leader in boardroom consulting.  Next to its size, the reputation of this strategic advisory firm has been part of the strongest organizational brands in the world.

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8 tips for successfully buying or selling a distressed business

18 April 2019 Consultancy.uk

Embarking on the sale of a business is one of the most challenging experiences a management team can undertake. Even serial dealmakers acknowledge that the transaction process can be gruelling, exposing management to a level of scrutiny and challenge through due diligence that can be distinctly uncomfortable.

So, to embark on a sale process when a business is in distress is twice as challenging. While management is urgently trying to keep the business afloat, they are simultaneously required to prepare it for scrutiny by potential acquirers. Tim Wainwright, an experienced Transactions Partner with Eight Advisory, says that this dual requirement means sellers of distressed businesses must focus on presenting their business in a way that supports buyers in identifying value, whilst simultaneously being open about the causes of distress. 

According to Wainwright, sellers of distressed businesses should focus on eight key aspects to ensure they are as well prepared as possible:

  • Cash: In a distressed situation cash truly is king. Accurate forecasting and day-by-day cash balances are often required to ensure any buyer is confident that scarce cash reserves are under proper control. 
  • Equity story and turnaround plan: Any buyer is going to want to understand the proposed turnaround strategy: how is the business going to enact its recovery and what value can be created that means the distressed business is worth saving? Clear presentation of this strategy is essential.
  • The business model: Clear demonstration of how the business model generates cash is required, with analysis that shows how financial performance will respond to key changes – whether these are positive improvements (e.g., increases in revenue) or emerging risks that further damage the business.  Demonstrating the business is resilient enough to cope with these changes can go a long way to assuring investors there is a viable future.
  • Management team: As outlined above, this is a challenging process. The management team are in it together and need to be consistent in presenting the turnaround. Above all, the team needs to be open about the underlying causes that resulted in the distressed situation arising.  A defensive management team who fail to acknowledge root causes of distress are unlikely to resolve the situation.

8 tips for successfully buying or selling a distressed business

  • Financing: More than in any traditional transaction, distressed businesses need to understand the impact on working capital. The distressed situation frequently results in costs rising as credit insurance becomes more difficult to obtain or as customers and suppliers reduce credit. Understanding how these unwind will be important to the potential investors.
  • Employees: Any restructuring programme can be difficult for employees. Maintaining open communications and respecting the need for consultation is the basic requirement. In successful turnarounds, employees are often deeply engaged in designing and developing solutions. Demonstrating a supportive, flexible employee base can often support the sale process.
  • Structuring: Understanding how to structure the business for the proposed acquisition can add significant value. Where possible, asset sales may be preferred, enabling buyers to move forward with limited liabilities. However, impacts on customers, employees and other stakeholders need to be considered.
  • Off balance sheet assets: In the course of selling a distressed business, additional attention is often given to communicating the value of items that may not be fully valued in the financial statements. Brands, intellectual property and historic tax losses are all examples of items that may be of significant value to a purchaser. Highlighting these aspects can make an acquisition more appealing.

“These eight focus areas can help to sell a distressed business and are important in reaching a successful outcome, but it should be noted that it will remain a challenging process,” Wainwright explains. 

With recent studies indicating that the valuation of distressed business is trending north. With increased appetite from buyers who are accustomed to taking on these situations, it is likely that more distressed deals will be seen in the coming months. “Preparing management teams as best as possible for delivering these will be key to ensuring these businesses can pass on to new owners who can hopefully drive the restructuring required to see these succeed,” Wainwright added.