JOHN BALDWIN and his son David, who run the unsurprisingly-monikered family firm Baldwins up in the Midlands, are straight-talking, salt of the earth, types.
That isn’t meant as faint praise, but it comes out in their views of what their job is; how best to do it; and making their practice bigger, better and faster.
Operating from ten offices that effectively encircle Birmingham, John Baldwin joined his father’s business in 1975, and hasn’t looked back since.
What was a small practice now runs with 180 staff, and has made a staggering 17 acquisitions since the early 1990s – the vast majority made since 2005.
As John (pictured) puts it: “We’ve bought firms from £100,000 turnover to £2m… we’ve bought shares, goodwill, paid varying multiples at varying times…paid varying deposits and different periods of deferred consideration…you name it, we’ve done it.
“We’ve an entrepreneurial spirit, with practices that circle Birmingham City Centre. Our motto would be ‘big enough to cope, small enough to care’.”
While the Baldwins don’t present their firm as one looking to become the next consolidator, of fifth ‘Big Firm’, there is little doubt that they are hungry to keep snapping up firms that fit into their mold.
Or, perhaps that should be two moulds. They will consider purchasing firms with less than £1m turnover if they are based near one of their current offices. More than a £1m, then there is the option of having the firm operate as a standalone – if there is enough distance between it and Baldwins’ other offices.
They expect many of their acquisitions will be of small practices where the partner is looking to retire. Baldwins will then look to drive economies of scale where the acquired firm is running older-fashioned, people-heavy, administrative functions. Accounting staff are “normally extremely safe,” John Baldwin adds. The firm can then use its size and breadth of service to drive value through its new clients.
Baldwins prefer to not have the acquired partners kicking around once a deal has been struck “Handover periods are as short as possible,” says John. He explains that having them around can create uncertainty for clients and for both sets of merged staff. As he so colourfully sums it up: “Once people are in ‘walking up and down the beach’ mode, they need to go at that stage.”
But Baldwins shouldn’t be taken as cold, or mercenary. For John and David, making sure all the parties involved and affected by a deal are satisfied, is paramount.
“We have an extremely good track record [on deals], we’re experienced in doing this,” says John Baldwin. “Retiring partners want clients well looked after and their staff – and want to get paid. It’s fair to say that overall, [the deals] have been excellent.”
A key part of Baldwins’ succession and quality strategy is holding onto its people, and this ties into managing new acquisitions.
Quite simply, young, aspiring team members are placed in charge of the new offices. A recent example would be of its Gravestock and Owen deal, where 28 year-old partner Sean Emery has been placed to run the office. Hence, the vast majority of its partners are in the 30 to 40 year-old bracket.
“Give lots of responsibility to these individuals, and reward them accordingly,” says John. “It encourages others – something to aspire to.”
While the Baldwins don’t see any end to the general economic struggles any time soon, they expect their use of technology to connect offices, and themselves with clients, to help maintain organic growth. But there’s no let-up in their plans to make more acquisitions.
As John says: “We have an excellent relationship with our bank. We’re still in the market.”
“The days of producing just tax computations and accounts should be in the history books. It’s about greater services, added value.
“I don’t see any reason why we can’t keep growing the way we are at this moment in time, with acquisitions growth, and organic growth.”
Bluffer’s guide to Baldwins:
Fee income: £7.3m (y/e 30 June 2012 – Baldwins Holdings)
Offices: Ashby de la Zouch; Coventry; Leamington; Loughborough; Nottingham; Stourbridge; Tamworth; Walsall; and Willenhall
Partners: 19 (Four in the ‘top tier’, 15 in the ‘2nd tier’)
Did you know? Baldwins has been highly acquistive in the past ten years – taking part in 17 deals – and is looking for more; Injury ended David Baldwin’s professional football career aged 19, but had studied AAT for three years – joining his father at the firm; The firm’s offices encircle Birmingham; John Baldwin joined his father’s firm in 1975 – straight out of university.
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