Welcome to Exit Strategy Accountants Sydney Australia

We are Exit Strategy Accountants, succession management and Financial Planners based in Sydney, offering Accounting and financial planning and advice for individuals, businesses and charitable trusts.

Our offices are located at High Street Sydney.

As a Sydney Exit Strategy Accountant we specialise in all forms of accounting financial planning advice on exit strategy, Pension and Retirement Planning, including Pensions in Divorce and Self Invested Personal Pensions, Investments, Insurance, Tax Planning, Inheritance Tax Planning and overall Financial Planning.

We are happy to offer to work on a fee basis, commission basis or a combination of the two, whichever suites you best. An initial consultation, usually lasting approximately 1 hour, is at no charge and we can decide together in that time the best way we can provide you with accurate, appropriate advice and planning.

When considering their financial planning and wealth management, many clients have established their aspirations and objectives for the future. These plans can change as circumstances change and we recommend that you review your financial planning on a regular basis to ensure that your pensions, savings and investments are still in tune with your original (and changing) plans.

Many feel that an annual review is appropriate, but personal changes can occur at anytime. However, don't forget that changes in legislation and investment markets can have an effect on what you want to achieve with financial services.

Using pensions as an example, here at Sydney Accountants  a regular review is recommended to ensure that they are meeting your expectations and on target to meet your aspirations for the future.

Sydney Exit Strategy Accountants are well placed to help you with a review and to provide any additional recommendations if required. Let us know what you want to achieve in retirement and we will look forward to helping you with your financial planning strategy.

One 'planning tool' that should help with your investment or pension planning is asset allocation.

This enables us at Sydney Accountants to consider a spread of investment and pension funds over various sectors of the investment markets. This can provide diversity and the potential to reduce investment risk whilst helping to maintain returns.

Exit Strategy Accountants & Planners  look forward to helping you with your independent financial planning.

Our success has evolved from the referrals our existing clients provide to us, we trust that the service and advice that we offer meets your needs both now and into the future.

Assuring you of our best service and attention at all times.

The Exit Strategy accountants. Succession management and Financial Planner Team.

John Jones -  Mary Smith  - Bill Brown 

Exit Strategy Accountants

Succession Management Accountants

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  Not relevant page fill while site is being worked on.... An exit strategy is a means of escaping one's current situation, typically an unfavorable situation. An organization or individual without an exit strategy Transition companiesmay be in a quagmire. At worst, an exit strategy will save face; at best, an exit strategy will peg a withdrawal to the achievement of an objective worth more than the cost of continued involvement.

In entrepreneurship and strategic management an exit strategy, exit plan, or strategic withdrawal, is a way to transition one's ownership of a company or the operation of some part of the company. Entrepreneurs and investors devise ways of recouping the capital they have invested in a company. The most common strategy is the sale of equity to someone else through a trade sale.

Exit Strategy & Sussession Management Accountants  are professional mergers and acquisitions companies that assist Middle Market business owners with their exit strategy. Services offered are often referred to as Transition Management services.

From time to time, management may decide it is necessary to downsize its operations. This typically involves discontinuing less profitable brands, products, product lines, or operating divisions.

Other types of exit strategy are:
Management buyout or employee buyout (common in the manufacturing industry)

An acquisition,(the ‘target’) by another. Consolidation is when two companies combine together to form a new company altogether. An acquisition may be private or public, depending on whether the acquiree or merging company is or isn't listed in public markets. An acquisition may be friendly or hostile. Whether a purchase is perceived as a friendly or hostile depends on how it is communicated to and received by the target company's board of directors, employees and shareholders. It is quite normal though for M&A deal communications to take place in a so called 'confidentiality bubble' whereby information flows are restricted due to confidentiality agreements (Harwood, 2005). In the case of a friendly transaction, the companies cooperate in negotiations; in the case of a hostile deal, the takeover target is unwilling to be bought or the target's board has no prior knowledge of the offer. Hostile acquisitions can, and often do, turn friendly at the end, as the acquiror secures the endorsement of the transaction from the board of the acquiree company. This usually requires an improvement in the terms of the offer. Acquisition usually refers to a purchase of a smaller firm by a larger one. Sometimes, however, a smaller firm will acquire management control of a larger or longer established company and keep its name for the combined entity.

This is known as a reverse takeover. Another type of acquisition is reverse merger, a deal that enables a private company to get publicly listed in a short time period. A reverse merger occurs when a private company that has strong prospects and is eager to raise financing buys a publicly listed shell company, usually one with no business and limited assets. Achieving acquisition success has proven to be very difficult, while various studies have shown that 50% of acquisitions were unsuccessful.The acquisition process is very complex, with many dimensions influencing its outcome.[1] There is also a variety of structures used in securing control over the assets of a company, which have different tax and regulatory implications:

Exit Strategy & Sussession Management Accountants

The buyer buys the shares, and therefore control, of the target company being purchased. Ownership control of the company in turn conveys effective control over the assets of the company, but since the company is acquired intact as a going concern, this form of transaction carries with it all of the liabilities accrued by that business over its past and all of the risks that company faces in its commercial environment.

The buyer buys the assets of the target company. The cash the target receives from the sell-off is paid back to its shareholders by dividend or through liquidation. This type of transaction leaves the target company as an empty shell, if the buyer buys out the entire assets. A buyer often structures the transaction as an asset purchase to "cherry-pick" the assets that it wants and leave out the assets and liabilities that it does not. This can be particularly important where foreseeable liabilities may include future, unquantified damage awards such as those that could arise from litigation over defective products, employee benefits or terminations, or environmental damage. A disadvantage of this structure is the tax that many jurisdictions, particularly outside the United States, impose on transfers of the individual assets, whereas stock transactions can frequently be structured as like-kind exchanges or other arrangements that are tax-free or tax-neutral, both to the buyer and to the seller's shareholders.

The terms "demerger", "spin-off" and "spin-out" are sometimes used to indicate a situation where one company splits into two, generating a second company separately listed on a stock exchange.

Distinction between mergers and acquisitions

Although often used synonymously, the terms merger and acquisition mean slightly different things.

When one company takes over another and clearly establishes itself as the new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exist, the buyer "swallows" the business and the buyer's stock continues to be traded.

In the pure sense of the term, a merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a "merger of equals". The firms are often of about the same size. Both companies' stocks are surrendered and new company stock is issued in its place. For example, in the 1999 merger of Glaxo Wellcome and SmithKline Beecham, both firms ceased to exist when they merged, and a new company, GlaxoSmithKline, was created.

In practice, however, actual mergers of equals don't happen very often. Usually, one company will buy another and, as part of the deal's terms, simply allow the acquired firm to proclaim that the action is a merger of equals, even if it is technically an acquisition. Being bought out often carries negative connotations, therefore, by describing the deal euphemistically as a merger, deal makers and top managers try to make the takeover more palatable. An example of this would be the takeover of Chrysler by Daimler-Benz in 1999 which was widely referred to as a merger at the time.

A purchase deal will also be called a merger when both CEOs agree that joining together is in the best interest of both of their companies. But when the deal is unfriendly (that is, when the target company does not want to be purchased) it is always regarded as an acquisition.

Business valuation Exit Strategy & Sussession Management Accountants

The five most common ways to valuate a business are

• asset valuation,
• historical earnings valuation,
• future maintainable earnings valuation,
• relative valuation (comparable company & comparable transactions),
• discounted cash flow (DCF) valuation

Professionals who valuate businesses generally do not use just one of these methods but a combination of some of them, as well as possibly others that are not mentioned above, in order to obtain a more accurate value. The information in the balance sheet or income statement is obtained by one of three accounting measures: a Notice to Reader, a Review Engagement or an Audit.

Accurate business valuation is one of the most important aspects of M&A as valuations like these will have a major impact on the price that a business will be sold for. Most often this information is expressed in a Letter of Opinion of Value (LOV) when the business is being valuated for interest's sake. There are other, more detailed ways of expressing the value of a business. While these reports generally get more detailed and expensive as the size of a company increases, this is not always the case as there are many complicated industries which require more attention to detail, regardless of size.

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Financing M&A Exit Strategy & Sussession Management Accountants

Mergers are generally differentiated from acquisitions partly by the way in which they are financed and partly by the relative size of the companies. Various methods of financing an M&A deal exist:

Cash

Payment by cash. Such transactions are usually termed acquisitions rather than mergers because the shareholders of the target company are removed from the picture and the target comes under the (indirect) control of the bidder's shareholders.

Stock

Payment in the acquiring company's stock, issued to the shareholders of the acquired company at a given ratio proportional to the valuation of the latter.

Specialist M&A advisory firms

Exit Strategy & Sussession Management Accountants Although at present the majority of M&A advice is provided by full-service investment banks, recent years have seen a rise in the prominence of specialist M&A advisers, who only provide M&A advice (and not financing). These companies are sometimes referred to as Transition companies, assisting businesses often referred to as "companies in transition." To perform these services, an advisor must be a licensed broker dealer, and subject to SEC (FINRA) regulation. More information on M&A advisory firms is provided at corporate advisory.

Motives behind M&A

The dominant rationale used to explain M&A activity is that acquiring firms seek improved financial performance. The following motives are considered to improve financial performance:

• Economy of scale: This refers to the fact that the combined company can often reduce its fixed costs by removing duplicate departments or operations, lowering the costs of the company relative to the same revenue stream, thus increasing profit margins.
• Economy of scope: This refers to the efficiencies primarily associated with demand-side changes, such as increasing or decreasing the scope of marketing and distribution, of different types of products.
• Increased revenue or market share: This assumes that the buyer will be absorbing a major competitor and thus increase its market power (by capturing increased market share) to set prices.
• Cross-selling: For example, a bank buying a stock broker could then sell its banking products to the stock broker's customers, while the broker can sign up the bank's customers for brokerage accounts. Or, a manufacturer can acquire and sell complementary products.
• Synergy: For example, managerial economies such as the increased opportunity of managerial specialization. Another example are purchasing economies due to increased order size and associated bulk-buying discounts.
• Taxation: A profitable company can buy a loss maker to use the target's loss as their advantage by reducing their tax liability. In the United States and many other countries, rules are in place to limit the ability of profitable companies to "shop" for loss making companies, limiting the tax motive of an acquiring company. Tax minimization strategies include purchasing assets of a non-performing company and reducing current tax liability under the Tanner-White PLLC Troubled Asset Recovery Plan.
• Geographical or other diversification: This is designed to smooth the earnings results of a company, which over the long term smoothens the stock price of a company, giving conservative investors more confidence in investing in the company. However, this does not always deliver value to shareholders (see below).
• Resource transfer: resources are unevenly distributed across firms (Barney, 1991) and the interaction of target and acquiring firm resources can create value through either overcoming information asymmetry or by combining scarce resources.
•  
• Vertical integration: Vertical integration occurs when an upstream and downstream firm merge (or one acquires the other). There are several reasons for this to occur. One reason is to internalise an externality problem. A common example is of such an externality is double marginalization. Double marginalization occurs when both the upstream and downstream firms have monopoly power, each firm reduces output from the competitive level to the monopoly level, creating two deadweight losses. By merging the vertically integrated firm can collect one deadweight loss by setting the downstream firm's output to the competitive level. This increases profits and consumer surplus. A merger that creates a vertically integrated firm can be profitable.
•  
• Absorption of similar businesses under single management: similar portfolio invested by two different mutual funds (Ahsan Raza Khan, 2009) namely united money market fund and united growth and income fund, caused the management to absorb united money market fund into united growth and income fund.
•  

However, on average and across the most commonly studied variables, acquiring firms' financial performance does not positively change as a function of their acquisition activity.

Therefore, additional motives for merger and acquisition that may not add shareholder value include:

• Diversification: While this may hedge a company against a downturn in an individual industry it fails to deliver value, since it is possible for individual shareholders to achieve the same hedge by diversifying their portfolios at a much lower cost than those associated with a merger. (In his book One Up on Wall Street, Peter Lynch memorably termed this "diworseification".)
• Manager's hubris: manager's overconfidence about expected synergies from M&A which results in overpayment for the target company.
• Empire-building: Managers have larger companies to manage and hence more power.
• Manager's compensation: In the past, certain executive management teams had their payout based on the total amount of profit of the company, instead of the profit per share, which would give the team a perverse incentive to buy companies to increase the total profit while decreasing the profit per share (which hurts the owners of the company, the shareholders); although some empirical studies show that compensation is linked to profitability rather than mere profits of the company.

Succession plan  guide

Exit Strategy Accountants - Succession Management Accountants

 

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This Succession plan guide has been developed by  Exit Strategy Accountants - Succession Management Accountants principal business resource

Copies of the latest version of this template and guide can be downloaded from www./plans.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Succession

 

Business & succession details

Business name: [Enter your business name as registered in your state/territory.]

Business structure: [Sole trader, partnership, trust, company.]

Current owner(s) covered: [Who is covered by this succession plan? Does this apply to all partners?]

Planned succession type: [Detail the type of succession you have planned? Will you be completely removed from the business or only partially? If it is a partial succession, what will be your future involvement in the business?]

Successor details: [Who will take over as successor - a family member, business partner or other? How and when will you communicate this to the organisation? Do you have an alternative successor in mind if the chosen successor is unavailable?]

Succession timeframe: [When do you plan to implement this succession?]

Restrictions: [Are there any restrictions placed on the succession?]

 

Proposed organisation structure

 

[Briefly outline what the organisation might look like once you leave.]

 

 

 

 

 

 

Exit Strategy Accountants  Succession Management Accountants

 

  

 

 

 

 

 

 

 

 

 

 

 

Key personnel changes

 

[List all of the positions in the organisation and the people that are expected to fill the position in the event of a succession.]

 

Job Title	Name	Skills required	Training required
[e.g. Owner/Manager]	[Mr Chris Brantley]	[Relevant qualifications and/or experience in running a business.]	[On the job coaching. Formal training in financial management.]

Skill retention strategies

[What procedural documentation do you intend on providing to ensure the skills of staff are maintained? Do you have an appropriate allocation of responsibilities? How will the new responsibilities be documented and communicated to staff? What internal processes will you implement to regularly check that the current skills of staff members are still appropriate for the business?]

Training programs

[What training programs will you be organising for possible successors? Are these in-house or conducted by external providers? Have you also considered change management training for the organisation in preparation for the succession?]

 

Registration changes

Registration transfers: [Which registrations do you need to transfer/change? For example business name, ABN, ACN, GST, intellectual property, domain name, local licences/permits.]

Change of business structure: [Do you need to change your business structure? For example, if the business was a partnership and the new structure will be a sole trader.]

Other transfers: [Lease, memberships, other?]

 

Legal considerations

 

Contracts/legal documents: [Is there a legal document that dictates the terms of the succession? If so, what are the terms? Are there any contracts that need to be modified in the event of the succession, e.g. partnership contract? Are there any new contracts that need to be drawn up?]

 

Buy-sell agreement: [If you are in a partnership do you have a buy-sell agreement in place? What are the terms? Will the remaining partner(s) buy your partnership share or will it be open to external partners/family members? Does this arrangement apply to all partners in the organisation?]

 

Will/testament: [As the business owner(s), have you drawn up a will or testament? What happens to the business or your share of the business in the event of a death?]

 

Insurance

 

Current insurance: [What insurance policies do you currently hold in the event of a disability, death or injury?]

 

Succession timetable

[The timetable below should detail each phase in the succession process.]

 

Phase	Succession action items	Start date	End date
[Brief phase description.]	[What are the succession action items that you need to complete for this particular phase?]	[When do you expect to start this phase?]	[When do you expect to end this phase?]

 

Contingency/risk management

[Detail the risks to the succession and any contingencies. For example: If the sale price you expected is not met, what will happen?]

 

Succession risk	Likelihood	Impact	Contingency
[What can go wrong while the succession plan is being implemented? What is the potential impact to your business?]	[Highly Unlikely, Unlikely, Likely, Highly Likely.]	[High, Medium, Low.]	[What is your contingency plan in the event that this risk happens?]

 

The Finances

 

Current value of the business

[What is the current market value of the business?]

 

Retirement income/payment

[Detail any retirement payments required from the planned succession date. What are the terms? Is it a one-off payment or regular payments?]

 

Sale details

[In the event that you put your business on the market during the succession, what is the minimum sale price you require? How long do you plan to have the business on the market? Who will receive the proceeds?]

 

Buyout details

[If you are in a partnership and you plan to arrange a buyout, what is the value of your share? What is this in percentage terms? What is the value you will sell to existing partners, family members or external third parties?]  

 

Taxation

[What taxes are payable in the event of a transfer or sale?]

Supporting documentation

 

Attached is my supporting documentation in relation to this succession plan. The attached documents include:

 

• [List all of your attachments here. These may include copies of contracts registrations, and resumes.]

Glossary

Exit Strategy Accountants - Succession Management Accountants

Australian Business Number (ABN) – a single identifying number used when dealing with other businesses and the Tax Office.

Australian Company Number (ACN) – the number allocated by the Australian Securities and Investments Commission (ASIC) when you register a company under Corporations Law.

Buyout – When one party buys another party's entire stake or share in a business.

Contingency – a planned response to a future circumstance.

Contract – a legally enforceable agreement made between two or more parties. A contract may be a verbal contract or a written contract (or may be partly verbal and partly written).

Domain name – a name that identifies an organisation's address on the internet, either a website address (the domain name follows the 'www') or an email address (the domain name follows the '@' symbol in the email address).

Goods and Services Tax (GST) – a broad-based tax of 10 per cent on the sale of most goods and services in Australia.

Intellectual property – laws that protect the property rights in creative and inventive endeavours including art, literature, music, films, sound recording, broadcasts and computer programs.

Licence – a legal document that grants a business or person with official permission to conduct a certain activity.

Milestone – a goal or objective with a target date.

Permit – a legal document granting, usually temporary permission, to carry out a planned action.

Retail lease – a legally binding contract between a business and a landlord that sets out the terms by which a business can occupy a landlord’s shop or premises.

Succession – when a party/parties succeeds or takes over from another.

Successor – a person/persons who will take over or succeed.

 

Third party – persons who are not a party to a contract.