A good relationship between client and adviser is as important to the success of a deal as securing finance or making a sound valuation. This was the message that emerged at a seminar recently hosted by the ICAEW’s corporate finance faculty.
All the panellists at the event spoke enthusiastically about how the strong
bonds they had with their advisers had helped them through various management
buy-outs.
More interesting than the warm, fuzzy talk about trust and friendship,
though, was the call by Bob Jones, chairman of Credit Solutions/power2contact,
for corporate financiers to be more proactive in seeking out people to work with
on deals.
Jones made his first, albeit unsuccessful, attempt at a management buy-out
when he bid for Lombard North Central, at the time a major subsidiary of
Natwest. It may have been his only attempt at a deal had Chris Ward, now the
global head of corporate finance advisory at Deloitte, not come knocking on his
door.
Ward had kept a close eye on Jones’ attempted MBO and at the same time
monitored which companies were ripe for deals. So, when he came across financial
services company Warrior Group, he knew he had a match and advised Jones on the
successful buy-in of the company. It is a partnership that lasted through other
deals, including the £89m buy-out of Clydesdale Financial Services from Next.
Ward’s proactive approach is something Jones believes other advisers would do
well to copy. There will always be individuals with an appetite for deals.
Instead of waiting for these entrepreneurs to approach them, corporate
financiers would do well to actively seek them out.
Relationships are important, but unless people are brought together
partnerships can never develop. Advisers should endeavour to be the ones who
bring individuals to the table. If deal makers go looking for clients, the
rewards and deals are bound to follow.
There will always be a steady stream of fees from clients who will make the
first move, but seeking them out can only mean more deals, something any adviser
will agree is a good thing.
Nicholas Neveling edits the corporate finance page