3 Years On, Progression Group reflects on the strategic decision to acquire Hartnett & Co

The background.

Progression Group is a long-standing business advisory firm based in Heidelberg, Melbourne, servicing various industries, including real estate, construction, and transportation. With a team of twenty accountants and four support staff, they focus on business improvement strategies, offering formal board advisory services tailored to enhancing corporate governance.

After being approached by a mutual business connection between themselves and Kev Ryan three years ago, they opportunistically acquired a family business owned by Kim and Rick Hartnett, Hartnett & Co.

Hartnett & Co was a successful accounting practice in Melbourne and built a strong client base specialising in tax and accounting services. Over time, their firm expanded, and they began to attract clients in need of specialised consulting services. Despite their thriving business and having run the firm for over twenty-six years, Kim and Rick realised they needed a succession plan to balance their workload and prioritise family time.

This is where Kev Ryan came in. He facilitated Progression Group’s acquisition of Hartnett & Co through a Merge to Retire™ agreement, offering a lump sum payment and an earn-out arrangement.

Three years on, we checked in with Nicholas Zoch, the Managing Director of Progression Group to learn how the deal and Kev’s involvement have helped their business.

What drove the decisions for both parties.

Hartnett & Co’s significant client portfolio appealed to Progression Group, aligning with their areas of expertise and presenting a strategic opportunity to expand their client base and enhance efficiencies.

So, with a focus on maintaining quality control and consistent methodologies, they agreed and aimed to capitalise on the synergies between the two businesses, using this as a platform to streamline their services and drive growth all while ensuring a seamless transition for clients and staff alike. As Nicholas explains:

“When we identified Hartnett & Co as an opportunity, it had a very good client base, which is what we liked. We knew there’d be a lot of efficiencies that we would benefit from, and it’s worked out exactly how we were hoping it would.”

On the other hand, Kim and Rick’s decision to pursue the Merge to Retire™ agreement was driven by two key factors.

Firstly, Kim and Rick found that the rapid growth of their firm, coupled with increasing demands from clients meant their workload was expanding rather than contracting, making it challenging to achieve a healthy work-life balance. Secondly, the desire to reclaim their time and prioritise family commitments while they still had the energy to do so became a driving force behind their decision to explore exit strategies.

Working with Kev Ryan.

Kev’s role as a transaction advisor facilitated smooth negotiations and ensured a favourable outcome for all parties involved. Nicholas commented:

“It was good to have Kev as a filter because you weren’t looking the vendor in the eyes or having hard discussions with them. He was able to relay concerns between parties reasonably and rationally so there were no egos involved.”

Kev’s adeptness in handling complex matters and ability to navigate various aspects of the deal was also beneficial to Nicholas and his team, ensuring they made data-driven, informed decisions:

“Kev had access to comparable data and provided us with an understanding of what has worked and what hasn’t worked in the past so that we could make more informed decisions.”

Nicholas also recalls Kev’s approachability and willingness to address concerns and challenges as they arose which fostered a productive working relationship, allowing Progression Group to leverage his insights and guidance effectively:

“Unlike most Advisors, Kev was not transaction-based, nor would he just do anything to force the deal. He was super laid back and easy to deal with. He had good integrity, would tell you the truth and there were no hidden surprises.”

The acquisition proved to be a win-win scenario for all. 

For Progression Group, the acquisition has successfully expanded their client base and enabled them to diversify their service offerings, enhancing their market position and revenue streams. The integration efforts have also led to improved operational efficiencies and streamlined processes, boosting productivity and profitability.

As a result, Nicholas could not speak more highly of Kev Ryan:

“It comes down to personality at the end of the day. If we didn’t have someone like Kev as a filter, the deal may not have gone through. Being able to talk to Kev, express our concerns and for him to massage it down to a reasonable question for the vendor ensured we received reasonable answers in return.”

For Kim and Rick, the result was equally advantageous.

The agreement provided Kim and Rick with a substantial lump sum payment, offering financial security, rewarding them for their years of dedication and allowing them to secure their financial future and regain their long-awaited family time. The earn-out arrangement embedded within the agreement ensured that Kim and Rick maintained a vested interest in its continued success incentivising them to assist with the transition process and encouraging a smooth handover of responsibilities.

Three years on, while Kim has retired, Rick has retained a role within the business allowing him to continue contributing his expertise and experience while gradually transitioning into a more relaxed and flexible schedule. As Nicholas reflects:

“It has been an extremely collaborative transition, even today, three years on, we enjoy catching up with Rick for the occasional lunch, a glass of wine and a laugh – I really could not have asked for a better outcome thanks to Kev and his team.”

Story by Angela Melotti of Momentum Media