EQ Accountants is planning several acquisitions as the company seeks to triple its turnover.
EQ – which has offices in Dundee, Glenrothes and Forfar – recently sold a majority stake in the business to Sumer.
Private equity-backed Sumer has bought into nine accountancy firms across Britain, with a combined turnover of around £100 million, in the past year.
As part of the investment, for an undisclosed sum, funds are also available for EQ to acquire other companies.
EQ acquisitions plan to triple turnover
Former Thorntons managing partner Craig Nicol joined EQ as a non-executive board advisor in August 2022 and was appointed chief executive in November.
He is hopeful EQ, which employs 133 staff, could acquire four firms in the next two years.
In five years, he wants the turnover of the business to triple from £11m to £33m.
He said: “The co-founder of Sumer, Warren Mead, is ex-KPMG and he and a couple of colleagues started looking at who is championing the SME sector in the UK.
“They decided the champions were the strong regional accountancy practices.
“They wanted to invest in quality regional businesses. We had discussions with them for a year to get the investment over the line.
“There is capital available to allow us to buy other accountancy businesses. We want to acquire businesses that are local SME champions.”
Mr Nicol said the acquisition targets are firms operating along the east coast, from the Borders to the north.
He said attractive firms are ones that could add specialisms, new geography or whose partners are looking to retire.
“We are already in at least three conversations at different stages of negotiation,” he said from the firm’s City Quay offices.
“I think with a fair wind we will acquire at least two businesses this year and at least another two businesses in 2025.”
Importance of culture and talent
Meanwhile, EQ is also looking to invest in its own staff in a competitive marketplace for talent.
Caroline McKenna – who formerly owned Dundee volunteering platform Social Good Connect – was appointed chief operating officer last October.
She is working on developing an employee shares incentive scheme and will lead the integration of companies EQ acquires.
She said: “We are restructuring the teams to make sure they are fit for growth.
“It’s tough to get young people coming through and staying in an accountancy practice.
“We are also looking at policies such as share incentives to attract and retain staff.
“Craig and I have a very positive working relationship with different skills that complement each other.
“We challenge each other on the right things to do but for both of us it’s always about people and culture and make sure people enjoy their work.”
Mr Nicol admits the growth targets are ambitious but is confident in the EQ team to deliver.
He adds: “Trebling the turnover in five years is not an easy target I think it’s achievable. We are already seeing opportunities in the marketplace.
“With the group of people we have here and the infrastructure Caroline is building we will be ready to facilitate that growth.”
Conversation