Connect with us


How your accountancy company can negotiate the best sales price to a private equity firm




According to Xeinadin Group founder Feisal Nahaboo, private equity firms routinely undervalue accounting firms, resulting in sellers receiving a “ridiculous” return on the companies they and their teams have worked so hard to build.

We speak exclusively to Nahaboo, who offers important advice to accountants to ensure they get the ‘golden touch’ in these negotiations.

Entrepreneur Nahaboo, the founder of leading accounting firm Xeinadin, has warned that private equity firms are “woefully undervaluing” accounting firms, leading owners to sell their companies well below their real value.

Because accounting firms operate in the service industry and enjoy low overheads compared to other types of business, investors “need to respect and reward this unique sector,” he says.

Private equity firms should recognize that accounting firms represent an “attractive growth model” with significant potential to provide additional client services, including but not limited to corporate finance, human resources, IT and outsourcing.


This means that the purchase of an accounting firm usually pays for itself within a few years.

And since accounting firms have a below-average cost base and can operate with an average profitability of 25 percent, investors need to be “very aware” that owners have no incentive to sell below a fair valuation.

Known as the man who “woke a sleeping profession” by tripling values ​​for more than 100 independent accounting firms in the UK and Ireland, Nahaboo advises practices should have the confidence to generate a reasonable return on their business.

Regarded as one of the UK’s leading wealth creation advisors, with over 20 years’ experience helping accountants make substantial sums of money, he showed his famous ‘golden touch’ when he founded the Xeinadin Group in 2019.

Dubbed a “corporate miracle”, the world’s first merger of 122 independent UK and Irish accounting firms through Nabahoo’s revolutionary Overnight Multiple Merger Model (OMMM) was immediately ranked as a top accounting firm, offering over 12x Adjusted EBITDA, according to some sources.


According to Nahaboo, the fact that Xeinadin was subsequently sold to leading private equity firm Exponent at an undisclosed “premium value” underscores three important points: first, that the auditing sector is extremely attractive to private equity; second, that if negotiated well, private equity will pay high sales values; and third, that other accounting firms are unfairly discounted for not understanding how to manage, negotiate and deal with private equity firms.

Xeinadin is “living proof that high values ​​can be aimed for,” says Nahaboo. When the company was founded, around 250 equity partners trusted him from his kitchen table to deliver triple values ​​across the board.

The consolidation process was completed in just 256 working days and within three years Xeinadin was valued at over £300m – a record-breaking achievement.

In stark contrast to Xeinadin’s valuation, Nahaboo says many private equity firms only offer value at around eight times the EBITDA for larger UK and Irish independent accounting firms.

Smaller companies fare even worse, being offered a “ridiculous” 5x Adjusted EBITDA multiple.


Larger independent companies should aim for at least 10x adjusted EBITDA, Nahaboo suggests, adding that accounting practices should use private equity as an investment rather than an exit strategy.

Since Xeinadin – which reported sales of £110.3m in May 2020 according to the Irish Times, Nahaboo has helped more than 200 businesses manage reviews.

Channeled through his OMMG (Overnight Multiple Merger Group) network, these individual independent accounting firms have also achieved favorable EBITDA thanks to the entrepreneur’s skills and knowledge in negotiating the best possible deals, either for investment or exit opportunities .

Here, Nahaboo offers 12 simple steps to help accounting practices secure their true value with private equity firms.

12 easy steps to negotiating with private equity

  1. Larger accounting firms should request figures of at least 10 times Adjusted EBITDA.
  2. Businesses should leverage Nahaboo’s OMMG network to determine and approve fair adjustments to EBITDA. This should not be left to investors as they may try to scale back the adjustments in favor of the buyer.
  3. Businesses should ask for at least 70 percent cash up front.
  4. The only exception to point 3 above is when the seller receives roll-up value in new shares of the group.
  5. Companies should strive to reduce private equity’s retained cash from the 70 percent upfront payment. While private equity will see it as a risk not to withhold part of the payment as a company’s customers are often dependent on the company’s partners, it is not understood that there is a greater risk for companies to withhold their cash when private equity Companies will be formed that will have majority ownership and have contractual clauses that can prevent payments.
  6. Firms must have dated exit sales schedules set out in agreements; Otherwise, they might struggle to release more equity.
  7. Firms should negotiate to keep their company’s existing brand name for at least three years – because customers want less disruption.
  8. Companies should sell their businesses to a private equity management team that is similarly cultured to keep clients comfortable. A smaller firm selling should seek investments from a team that has extensive experience working in a smaller accounting firm and experience managing SMEs and smaller owner-managed businesses.
  9. The growth targets should currently be in the range of five percent pa. Some private equity firms will charge at least twice that, which may be unrealistic for some smaller firms focused on providing great service to their clients at a fair price. Customers don’t want to feel ripped off with rising prices after a new property.
  10. Clawback provisions are 100 percent negotiable. A clawback clause means that the seller loses an equal value of the retained cash if it fails to meet growth targets. Some private equity firms report recoveries in excess of 200 percent. That seems grossly unfair.
  11. The ban on auditors following a private equity investment can be negotiated to two years instead of three to four years in various circumstances.
  12. Companies should ensure that every investor is offering next-generation employees at least inflated salary and growth stock. Investors need to invest in key individuals driving succession.

Feisal Nahaboo – The entrepreneur with the golden touch

Entrepreneur Feisal Nahaboo’s name is synonymous with “wealth creation” in the accounting industry.

He is credited with pioneering the concept of the “multi-service accounting firm,” which enables firms to double value and triple profits over a period of three to five years by adding up to 42 new lines of service to their offering.


With this innovative process, he revolutionized the accounting sector between 2001 and 2013, raising industry standards and profits and setting a new industry benchmark. What was once Nahaboo’s radical solution is now considered the norm.

Likewise, Xeinadin – its first overnight multiple merger – has delivered tremendous results.

All of the independent accounting firms that have joined the merger will receive significant premium values ​​from private investment firm Exponent, taking their valuation to a projected £320m-340m – the kind of growth that typically takes 50-100 years.

Nahaboo has helped more than 100 UK and Irish accounting firms score up to triple in 2022 alone and is now enabling individual independent accounting firms to do the same with its OMMG network.

Through the network, he can help an independent small or large auditing practice to achieve “super premium values” through his triple evaluation process.


For example, a company with annual sales of £3m can expect a valuation of £6m to £9m.

A company with a turnover of £1million, meanwhile, is likely to receive up to £2million in cash and a share of shares (worth hundreds of thousands of pounds) in its own practice to incentivize it to continue running successfully.

Nahaboo also has the ear of over 40 independent private equity investors interested in investing 50 to 80 percent in individual accounting firms “overnight.”

Nahaboo explained his process as follows: “First, I study the company’s income statement and balance sheets and make various recommendations regarding investors.

“Then I carry out an analysis of the service mix and advise accordingly. This is followed by a Pareto analysis in which I examine the structure of the organization and offer advice on different specializations that can be offered.


“Finally, I bring a private investor together with the auditing practice.”

The benefits go well beyond monetary rewards — it also allows accountants to make an investment without having to step out. In addition to the strong valuation, salaries and dividends should be in the six-figure range.

Upon signing, owners and partners receive a huge lump sum, worth more than their business, so, as Nahaboo puts it, “they can enjoy life now while still having equity and a hefty, six-figure annual reward for the… management of the company.

“This is an incentive for those within the accounting firm who have the expertise and experience to continue the business at high profit levels, which in turn raises standards across the industry.”

Nahaboo says its triple grading process has been “refined over many years” and is in high demand.


He said: “As a trusted advisor to accountants, over the past 20 years I have signed contracts with over 1,000 accounting firms who have relied on my services.

“Some of them are now using me as part of the OMMG network to negotiate a fair and strong valuation for their firm’s partners and shareholders.

“Under my other business regimes, Xeinadin and Alitam, I have developed very strong relationships with investors and brokers including David Mortlock, MD of Berenberg Bank – one of the highest paid and most successful bankers in town.

“I get a lot of inquiries from people interested in joining the OMMG network and I’m available to anyone interested.”

To request a review about OMMG, visit For more information on Faisal Nahaboo, visit or keep following him LinkedIn.



Rocket Lab targets Neutron launch price to challenge SpaceX




rocket lab is building a larger, reusable launch vehicle called the Neutron and is targeting a price near $50 million per launch to challenge it Elon Musk’s SpaceX.

“We are positioning Neutron to compete head-to-head with the Falcon 9,” Rocket Lab’s chief financial officer Adam Spice said earlier this week while speaking at a Bank of America event in London on Tuesday.

The company announced Neutron when it went public in 2021, with Spice saying the rocket remains on track to debut in 2024 its fourth quarterly report last month, Rocket Lab said it has begun production of Neutron’s first armor structures, as well as construction of the launch pad for the rocket. The company plans to conduct the first “hot-fire test” of an Archimedes engine that will power Neutron “by the end of the year,” Spice said.

Sign up here to receive weekly issues of Centre County Report’s Investing in Space newsletter.


SpaceX is touting a $67 million Falcon 9 launch, and Spice says Rocket Lab is aiming to match that on a cost-per-kilogram basis for satellite customers. That means Neutron is “targeting a launch service cost of $50 million to $55 million,” Spice said.

Spice also noted that Rocket Lab expects to fly the reusable Neutron boosters “10 to 20 times” each, within range of the current reusable performance of a Falcon 9 booster.

“We ultimately expect margins on Neutron launches to be in the range of about 50%,” added Spice. He estimated the commodity cost of each neutron at $20–$25 million, with “nearly half of that” coming from the rocket’s upper, non-reusable second stage.

Additionally, with SpaceX pushing hard to develop its massive Starship rocket, Spice alluded to the potential for the company to veer away from flying Falcon 9 missions.

“We don’t have any hard data on that, but if that were to happen, that would certainly be an incredibly optimistic thing for Neutron,” Spice said.


In the meantime, Spice said Rocket Lab aims to maintain its position as the “dominant player” in the small satellite launch market sub-sector with its Electron vehicles. The company expects to launch three Electron missions in the second quarter, two of which have already been completed, and is “on track” to launch 15 missions this year, Spice said.

More than rockets

Spice also stressed to the Bank of America audience that Rocket Lab is “much more than” just a rocket company. In fact, the company’s acquisitions and expansion into building satellite components and spacecraft have become the majority of its quarterly revenue.

“All of this leads to the biggest opportunity in space that’s really on the application side,” Spice said.

As CEO Peter Beck has previously notedRocket Lab’s goal is to create an “end-to-end platform for customers” who need space-based services. Spice said the company wants to operate satellites and “deliver data to our customers and develop a recurring revenue stream from it,” essentially eliminating the need for other companies to build and operate their own satellites.

“A lot of the companies that we are [launching to orbit on Electron] are very unnatural space facility owners,” Spice said, adding that “the best space facility owner is someone who can launch.”

Rocket Lab CEO on the importance of the US Space Force mission to the company
Continue Reading


Rivian Automotive wants more engineers working at its manufacturing plant




Electric vehicle company Rivian plans to go public

News from Spencer Platt/Getty Images

Rivian Automotive (NASDAQ:RIVN) is reportedly planning to move more of its manufacturing engineering team to its Normal, Illinois manufacturing facility to accelerate production of electric trucks and SUVs

Sources indicate a will to reorganize

Continue Reading


Tesla Stock: Cathie Wood Sells $27 Million Of TSLA To Buy The Dip On Coinbase, Block




Fund manager Cathie Wood and her firm ARK Invest Management sold millions of Tesla shares on Thursday, inviting shares of Tesla coin base (COIN) as the crypto exchange stock fell after receiving a Securities and Exchange Commission warning.


Tesla Stock Sale

Wood unloaded a total of 139,642 Tesla (TSLA) shares on Thursday were valued at $26.84 million based on the closing price of 192.22, according to an investor update on Thursday night. The company sold 119,630 shares of its ARK Innovation ETF (ARKK) and 20,012 shares from the ARK Next Generation Internet ETF (ARKW).

Coinbase stock crashes as SEC turns aggressive

The sale ended a Tesla buying streak for Wood. Added ARC Tesla shares valued at $12.6 million on March 8th after buying 1.3 million shares in December and January, according to Barron’s data. Tesla shares closed Thursday 5.5% higher than their March 8 close and 1% below their Dec. 1 close. Tesla stock is up 76% so far this year.


TSLA shares tumbled 0.9% on Friday.

Buy the Coinbase Dip

Meanwhile, ARK Invest added 268,928 shares of Coinbase worth $17.83 million based on Thursday’s close of 66.30. ARK added 230,599 shares to ARKK and 38,329 shares to ARKW, respectively.

COIN shares fell 14% on Thursday after the company announced it received a Wells Notice from the SEC late Wednesday, warning that the regulator intends to recommend enforcement action for potential securities violations. Coinbase and its executives remain firm in their belief that their products are compliant.

On March 21, Wood sold 160,887 shares of Coinbase from the ARK Fintech Innovation ETF (ARKF) to mark ARK’s first COIN stock sale of the year.

COIN stock rose 2.3% on Friday. Coinbase shares have rocketed 101% year-to-date. Still, shaken by crypto panics, Coinbase stock remains well below its all-time high of 368.90 set on Nov. 9, 2021.


Wood and ARK also bought 320,557 shares of the payment processor block (Q), valued at $19.84 million based on Thursday’s close of 61.88. SQ stock slipped 2% on Friday.

Square drops short seller fees, company considers legal action

Follow Harrison Miller on Twitter for more stock news and updates @IBD_Harrison


Is Tesla Stock a Buy Now? Here’s what revenue charts show


A fund gives Cathie Wood a run for the money

Get an edge in the stock market with IBD Digital

Find stocks to buy and watch with the IBD Leaderboard

Identify bases and buy points with MarketSmith’s pattern recognition

Continue Reading