The world of accounting is abuzz with talk of M&A.
The recent wave of private equity (PE) investments promises growth and modernisation, but for many, it comes at the cost of autonomy and culture. While the allure of PE is undeniable, Nikki and Nigel Adams, the force behind Ad Valorem, show that there’s another path—one that champions independence and strategic growth.
With over 20 years of experience and successful M&A under their belt, Nikki and Nigel have crafted a blueprint for thriving in today’s complex market. This article breaks down their approach, sharing
actionable insights for firms looking to scale via acquisitions without compromising their core values.
If you're an independent firm navigating the M&A landscape, this piece is for you.
1. The current M&A landscape: Private equity’s double-edged sword
The influx of private equity has sent ripples through the accounting industry. While PE firms bring capital and resources, Nigel notes, “They’re not here to build a happiness factory; they’re here for profit.” This focus can sometimes come at the expense of the firm’s people-first culture.
What this means for independent firms:
The push for profitability creates pressure on smaller practices, especially those under the sub-million mark, which struggle to compete with the resources of PE-backed firms. Nikki observes, “These smaller practices are particularly vulnerable, but they also hold potential”.
Why this matters
: Independent firms can step in to offer what private equity often doesn’t—flexibility, personalised service, and a culture that values people as much as profit.
Before considering M&A, reflect on your long-term goals. Is maintaining your firm’s unique culture a priority? If so, build a growth strategy that aligns with these values.
2. Strategic opportunities for independent firms
The good news?
Independent firms have unique strengths that position them well for strategic acquisitions. By focusing on smaller practices that lack succession plans or struggle to keep up with technology, you can expand your services while fostering growth for acquired teams.
Tapping into the sub-million market
Nikki points out that many sub-million-pound practices are run by partners wearing multiple hats—from HR to compliance. These practices often operate with thin margins and limited infrastructure, making them prime targets for acquisition.
“Sub-million firms can feel like they’re treading water,” Nikki shares. “But with the right acquisition approach, we can provide them a home where both their staff and clients flourish.”
Think of acquisitions as partnerships: You’re not just taking over a practice—you’re integrating it into something bigger and better.
Action: Your plan for strategic acquisitions
• Define your strategic goals: Pinpoint what you want from an acquisition: talent, new services, or market reach. Example: Nikki and Nigel’s most successful acquisitions introduced complementary services, like audit expertise, which opened doors to bigger clients.
• Pinpoint what you want from an acquisition: talent, new services, or market reach.
• Example: Nikki and Nigel’s most successful acquisitions introduced complementary services, like audit expertise, which opened doors to bigger clients.
• Conduct a cultural audit: Before finalising any deal, engage with the team to assess compatibility. Ask, “Do they share our work ethic? Our vision?” Insight: Their acquisition of a cloud-based practice succeeded because both firms prioritised modern tech adoption.
• Before finalising any deal, engage with the team to assess compatibility. Ask, “Do they share our work ethic? Our vision?”
• Insight: Their acquisition of a cloud-based practice succeeded because both firms prioritised modern tech adoption.
• Plan post-acquisition integration: Map out detailed plans for merging teams, tech, and processes to minimise disruption. This ensures seamless client service continuity. Pro Tip: Use dedicated integration managers to guide new teams and foster collaboration.
• Map out detailed plans for merging teams, tech, and processes to minimise disruption. This ensures seamless client service continuity.
• Pro Tip: Use dedicated integration managers to guide new teams and foster collaboration.
3. Balancing innovation with operational efficiency
The tech landscape in accounting is evolving rapidly, and for many firms, keeping pace can feel overwhelming.
But Nigel’s perspective on leveraging innovation while maintaining efficiency is both pragmatic and inspiring. “To be honest with you,” Nigel shares, “if I were on my own now, I probably wouldn’t be doing this anymore. I glaze over pretty quickly when it comes to the tech side.”
Fortunately, Ad Valorem’s success in this area comes from a deep trust in their team, particularly the younger generation.
Leveraging Your team’s strengths
Nigel credits their ability to adapt and integrate new technology to the innovative mindset of their staff. “We’ve got amazing people here who really get it,” he explains. This allows the firm to stay ahead without needing the large-scale tech investments typical of bigger, PE-backed firms.
Nikki adds, “We want our people to be able to grow and build within the firm.” By empowering younger staff to lead on technology adoption, Ad Valorem not only stays relevant but also strengthens employee engagement.
The private equity contrast
“I don’t think it’s in private equity’s interest to innovate,” Nigel emphasises. “They’re focused on the bottom line, not on allowing people to experiment or pursue projects without a guaranteed outcome.” This highlights why independent firms, driven by intrinsic motivation, can innovate more effectively.
Why this matters
: Independent firms have a unique advantage in their ability to remain agile. They can experiment, learn from mistakes, and refine processes without the constraints of external shareholders.
Innovation doesn’t always require big spending. Trust your team, especially those who grew up in the digital age. Their knowledge can be the catalyst for growth and adaptability.
4. The human element: Prioritising culture in acquisitions
When it comes to M&A, numbers matter—but culture is what makes the integration stick. Nikki stresses, “We learned that engaging with the team early and understanding their dynamic is critical. It’s not just about buying revenue; it’s about ensuring everyone feels part of the same story”.
Building a supportive environment
Early in their M&A journey, Ad Valorem acquired a firm without much interaction beforehand. “We found out post-acquisition that there were internal team conflicts we hadn’t anticipated,” Nikki reveals. Now, they use a buddy system that pairs new team members with experienced staff to help navigate the transition.
If you’re integrating a new team, put yourself in their shoes. What would make them feel welcomed and valued?
During due diligence, go beyond financials. Spend time with the potential new team. Ask questions like, “What excites you about this change?” or “What worries you most?”
5. A word of caution: The hidden costs of M&A
“Acquisitions aren’t easy,” Nigel admits. “You need to know why you’re doing it and have a plan beyond ‘we should’”.
The true cost of integration
Integrating new practices isn’t just a checklist exercise; it’s a marathon. Ad Valorem often places team members on-site during acquisitions to manage integration. This approach helps identify potential challenges early on but requires significant resources.
Nikki’s advice? “Don’t be seduced by headline numbers. Due diligence can shift expectations, so prepare for surprises.” The Adamses learned that while offers may look attractive on paper, they don’t always hold up.
Be cautious and thorough. Ensure you have a dedicated team to handle integration smoothly, even if it means additional investment upfront.
Always ask, “Is this acquisition a strategic fit, or am I just chasing growth for growth’s sake?”
Charting your own path
M&A in accounting is not for the faint-hearted. Nikki and Nigel Adams’ journey proves that with a clear strategy, a focus on culture, and the courage to innovate, independent firms can thrive amidst market disruption.
Their approach champions not just growth, but growth that aligns with their values and empowers their people.
Acquisitions should enhance your firm, not transform it into something unrecognisable. Stay true to your strengths, keep your team at the heart of your decisions, and embrace strategic growth with confidence.
Take a moment to outline your M&A strategy. Identify what makes your firm unique and seek acquisitions that enhance, not compromise your vision. The road ahead may be complex, but with the right approach, it’s one you can navigate successfully.
