Countplus will launch a new business to invest in leading accounting business through a shared equity model with plans to target firms with profits above $2 million
The new business — Blue789 — grew out of a project called C2 and had been previously flagged by Countplus and will target firms with a net profit before tax of around $2 million or the ability to reach that level within three to five years.
According to Countplus initial equity stakes of 30 per cent will be offered to drive succession and growth among the accounting firms targeted with principals to maintain ownership and management control.
Countplus said the Blue789 approach was designed to “combine corporate best practice with the entrepreneurial spirit and zeal of business founders and principals” with the group to be headed by former Crowe Horwath senior executive Barry McGee.
McGee’s appointment was announced in November 2014 as was the appointment of Phil Aris, previously chief executive of Total Financial Solutions, the largest subsidiary within Countplus, to the chief executive role at Countplus, taking over from Michael Spurr.
Aris said the Blue 789 business developed from the need for accounting practice principals to have access to succession solutions and funding to compete and grow.
He said that when accounting practices sold 100 per cent of their equity revenue and earnings flattened as principals become disincentivised to drive growth and Blue 789 would partner with principals who were interested in retaining control and driving growth.
Aris said the new business was consistent with previously announced direct equity plans for existing Countplus subsidiaries.
While C2 had been flagged by Countplus chair Barry Lambert in April 2013 its formal name and business model was released as part of the company’s half year results released earlier today.
Countplus reported net profit before tax of $8.73 million (down 7.4 per cent) with a net profit after tax of $6.08 million (down 10.3 per cent).
