In January, it was announced that VIEW Group had acquired 100% of the shares in Cottons Group Ltd.
In an article for anyone who wants a clearer view of what a sale process involves – whether they’re actively considering a sale, enjoy the technical side, or are simply curious about what to expect when a buyer gets serious – Guy Pain, a corporate finance specialist who has worked on hundreds of deals and is a Partner at Cottons Group, explains how the deal worked.
What was the moment you decided Cottons should explore a deal, and what had changed in the business?
We first considered a sale about two and a half years ago. The number of private equity firms coming into the market and consolidating accountancy groups was increasing.
There used to be a model based on selling on a multiple of gross recurring fees, but now that private equity has come into the market, practice valuations have increased.
When partners retire or step back, the remaining partners usually have to fund the buyout. In Cottons Group’s case, it was even more difficult to fund partner exits through debt as higher valuations make the funding decision heavier for the continuing partners.
So, you really need a big chunk of capital coming in to be able to do the restructuring, fund the technology growth, and create an opportunity to continue your own M&A strategy.
What were your three non-negotiables for a buyer, and which one did you refuse to compromise on?
I talked to all members of the board, and they all had different opinions, so we went to market with an open mind, to see what was available. But one requirement was clear, which was the ability to continue to run Cottons Group in their own way. Without a great deal of interference.
We wanted to avoid a scenario where somebody comes in, takes over, and decides they want to do everything their own way. They upset the staff; the staff leave. It wasn’t just about what was happening for the people looking to leave, it was also for the future of the staff and the firm.
Red flags sellers need to look for in a buyer include poor reputation, deals becoming horrendously complicated, staff becoming disillusioned post-acquisition, and losing autonomy.
We asked to speak to firms acquired by each candidate to understand their experience, so that we could build an overall impression rather than relying on one claim or one meeting.
How did VIEW Group come onto the radar?
VIEW Group had been on the radar back in early 2024, but the sale was shelved at the time. When I joined the process in February 2025, Managing Partner Will Smart and I ran a structured shortlist. We wrote a 50-page information memorandum on the firm and its prospects and circulated it. We spoke with about 15 to 20 organisations and VIEW came back strongly many times.
We had a Teams meeting in July, they came over in August, presented to the board and met the board members. I negotiated with them about their ideas for Cottons Group.
At the time, I was pretty sure they were the one we wanted.
We had a board meeting on September 7 and it was accepted, we told the rest of the partners and the day after the partners meeting, we signed the letter of intent.
From there it was nine weeks of hell until we completed. I say that partly in jest – not because the deal was a mistake, but because the workload was intense. Each of the partners were shown the pros and cons of each offer and it was a democratic decision.
That sounds like a short timeline. Is that normal?
Short answer – no. We did in nine weeks what normally takes about nine months. VIEW Group wanted it completed before the end of the calendar year, and it suited Cottons Group too, because you don’t want everything in limbo. When that happens, people don’t make decisions and you need to continue to run the business.
We were working 16 hours a day, seven days a week, and once the deal moved into the final stage I was having six to eight calls a week plus dealing with lawyers.
What made it so intense, and what did the process involve?
The process was more complex than many deals for a few reasons.
First, structure. Cottons Group had two entities, and the background work to simplify that at least doubled the work, because the LLP needed to be transferred into a limited company before the sale of the limited company could complete.
Second, the buyer context. VIEW Group is headquartered outside the UK, and they wanted Cottons Group to be a ‘platform investment’ in the UK – meaning Cottons Group would be a base for growth. That increased the level of checking required.
Third, workload. Due diligence became the biggest internal time sink. We ended up supplying about 1,500 documents, including documents we had to prepare from scratch.
It was an information gathering exercise that expanded: the list looked reasonable at first, but once lawyers got involved it soon expanded. Due diligence covered commercial, legal, financial, tax, insurance and IT, but the three big things were technology, clients and employees.
How did you keep the firm running while all this was happening?
I had to reduce my client workload during the tightest phase: and it’s fair to say the last quarter of the year wasn’t our most productive period, but the priority was keeping delivery moving while the deal work ran in parallel.
What advice would you give to other firms, even if they’re not looking to sell yet?
Get everything in order and into folders so it’s easily accessible for every aspect of the business – legal and compliance, property, GDPR, AML, institute regulations. Doing that early makes the process a lot easier.
Regarding legal costs and momentum, you’ve got to know exactly what the key things are to really argue about, and don’t waste time on the totally insignificant stuff or you end up with huge legal fees.
To learn how Cottons Group’s corporate finance team can support owners through major decisions visit our website here.
