Long-term partnership
Taking the approach of a long-term partnership rather than an immediate purchase, the DBO approach offers a more flexible pathway to realising value for principals – and continuity for their clients.
Aimed at high growth firms, the process begins with a minority investment, enabling firms to retain full control while accessing operational, compliance and financial support to scale with confidence and realise greater value as they grow.
For Frank Banks-Seeney, this approach was key in his decision to join Fairstone.
Stand-out proposition
He explains: “I had meetings with a lot of companies who were interested in the business, but Fairstone’s proposition was the one that stood out.
“They shared the same values as us in putting the client first. And what was incredibly important to me was the ability to keep running the business and to make sure that we had continuity – I wanted our clients to be able to be served by the same people in the same office doing the same things and the DBO process allowed us to do that.”
Frank describes the DBO process as “like getting engaged”: a firm signs up to Fairstone with an initial valuation for the business. There is then a transition period whose length is agreed by both parties before a full acquisition takes place and the firm becomes part of Fairstone.
Gradual transition
“You sort of try each other out for a period and that really appealed to me – for example, we started off with dual branding so clients got used to the idea of a transition before it happened,” explains Frank.
The unique nature of the DBO model allows firms to grow in partnership with Fairstone during the transition period so that both parties in the deal can benefit.
Frank says: “The support from Fairstone in terms of compliance and paperwork freed up probably a day and half a week for me to talk to clients and to grow the business.
“We also got assistance from Fairstone’s customer acquisition programme, giving us access to new clients.
A huge difference
“That all made a huge difference to us and we increased our growth quite significantly – if I had been running the business without that help, we would not have been able to grow so fast.”
Two years after signing the initial agreement, Andrew Cohen Associates’ transition period ended and the firm was fully acquired by Fairstone.
Thanks to the unique structure of the DBO model, Frank was able to benefit from the firm’s extensive growth when it came to finally selling up.
He explains: “I had targeted 10% over the original agreed value when it came to the earn-out phase but in the end it was almost 80% over, which was way more than I had anticipated and was just fantastic.
