New consolidator emerges
Yet another consolidator has emerged and will list on the Australian Stock Exchange in the next few weeks.
Perth based Sterling Financial Services is the new accounting consolidator on the block and is seeking to raise $5 million from its recently released prospectus.
This will take the total number of accounting consolidator practices in Australia to five. The other four are Harts, Stockford, the PIS owned Professional Accountants Limited and Investor Group. Most of the groups buy accounting practices and then work on developing financial planning through these practices.
Sterling was established by Perth accountant Richard Lambe in partnership with ex Sealcorp executive Harry Hilton and Perth boutique investment bank Chatsworth Stirling.
According to Sterling director and chief executive Richard Lambe, the idea to start a consolidator group began in April last year following discussions with Hilton and Chatsworth Stirling.
"The focus will be buying accounting firms with fees of up to $2 million," Lambe says.
"We have entered into two strategic contracts with Grant Thornton [a provider of education to 70 small to medium practices] and Goodwin Mitchell & O'Hehir, [a leading business and accounting practice brokers in WA] to get the right support for the consolidation."
The company plans to raise $5 million from the offer of 25 million shares at $0.20 each. It will then be able to act on options it now has to buy up six WA accounting practices with a combined client base of 6500 clients with $2.5 million in fees.
Lambe says the group will concentrate on successful suburban and regional accounting firms, but will stand back from involving itself in the running of each accounting business.
"We certainly won't be interfering with the traditional accountant/client relationship because that is the principal value Sterling is buying," he says.
Lambe says that the consolidator will provide accountants with access to financial planners, products and resources that will open the door to clients seeking financial advice beyond the services offered by accountants.
Sterling chairman Harvey Collins says the company will leverage the accounting relationship with clients whose additional demand for financial advice is not being met.
"Accountants and financial planners are natural partners, and we are responding to people who look to their accountants as the first choice," he says.
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