HMT: 30 years and counting

Corporate finance specialist HMT looks forward to its fourth decade under founder Andrew Thomson’s pragmatic leadership.

Thirty years ago, Andrew Thomson, David Hurst and Bruce Morrison of Big Four accountancy firm EY, were deciding whose surname would take the prestigious first place in their new firm’s title. They put Thomson in charge of pulling names randomly out of a hat.

“The first name I drew was mine,” he said. “But they then checked the two remaining names to discover that they were the same.”

His tongue-in-cheek version of HMT’s titular decision showdown offers an insight into a business approach that doesn’t take everything seriously all the time – only when it matters. The fact that Thomson appears last in the letter line-up also indicates a pragmatic leadership style where compromise seals deals – an important attribute in the world of corporate finance.

So, HMT it was and Thomson continues to drive the firm forward with no intention of slowing down. Retirement anytime soon isn’t on his agenda, either. As he said when picking up the Lifetime Achievement award at the 2022 Thames Valley Deals Awards: “The next part of my journey is to use five to 10 years to build further scale in the business and grow the brand to be able to leave a legacy for the next guys to take over.”

Sleeves rolled up

The firm provides corporate finance advice and transaction support covering due diligence, debt advisory and financial modelling (for more information scan appropriate QR code). Its focus is on entrepreneurially owned mid-market businesses, typically valued at up to £100 million. To date, HMT has completed over 500 transactions.

Thomson’s ambition burns as brightly as ever. “We thought that starting HMT when we were in our early 30s was an opportune time – we were old enough to have gained the corporate finance experience that clients would look for,” he said, “but we were still not afraid of rolling up our sleeves.”

His pragmatism and commercial acumen are what keep clients knocking on HMT’s Henley-on-Thames office door for advice and support. The deals that HMT handles are often life-changing events for its business owners and many remain Thomson’s friends and friends of the firm long after transactions have been completed.

“The local corporate finance community is very vibrant and there is strong loyalty and mutual respect between other corporate finance professionals, private equity firms, debt providers and lawyers"

Gap in the market

Providing quality corporate finance advice to small and mid-sized companies was not well served and was a gap in the market that HMT seized on in 1992.

“Good corporate finance advice for the lower to mid-market wasn’t great back then. There were very few corporate finance boutiques and beyond them it was really only the very large international accountancy practices that had credible corporate finance expertise and they were only interested in the larger deals.”

Starting out from an ‘office’ in one of their homes, HMT advanced quickly. “As with any new business, you start in ‘survival’ mode but we quickly gained traction with our clients and switched to growth mode. We then grew a team built of technically strong people with the right mindset, enthusiasm, and energy levels – the all-important soft skills required for astute dealmaking,” said Thomson.

He added: “We always say that we understand entrepreneurial businesses because we are one.”

The firm opened a London office in 2015 to serve a growing client base in the capital, tap new opportunities and widen the pool of talented professionals to recruit from. With David and Bruce retiring from the practice, three new partners were appointed: Paul Read (in 2012), James Thomas (in 2018) and Wendy Hart (in 2021). She matches Thomson’s 30 years at the corporate finance coalface and was named Dealmaker of the Year at the 2022 Thames Valley Deals Awards. The firm now has a team of 25 and Thomson anticipates recruiting a further two partners in the near future. And it starts its next chapter with a rebranding.

“Wendy’s decision to join us as a senior corporate finance partner from Grant Thornton validates the HMT model,” he said.

More complicated deals

The deal landscape is constantly evolving. Thomson elaborated: “A few years ago an exit or realisation event from an entrepreneur usually coincided with his retirement. However, the most common transaction we are now seeing is more of a two-stage process where owners are happy to bring in private equity partners to realise some value and continue in the business before fully selling up later.”

Currently, the firm is handling a relatively high proportion of deal activity involving technology-enabled business-to-business companies, such as e-commerce fulfilment, IT managed services and IT security.

On a typical buyout deal, HMT will field a team led by a partner, with a director, manager and pull in other specialists, such as financial modelling and research. “Deals usually take from six to 12 months to finalise, with the most intense period at the end,” he said.

“Often, the smaller deals can actually be the more demanding, especially if the sellers are inexperienced in the exit process or have limited in-house financial resource to handle a transaction,” he added.

The firm likes to get involved as early as possible with clients, often years ahead of any decisions by their owners on their future direction. “The earlier the better, as we can add more value for clients in what we do,” said Thomson.

Partnership support

“The local corporate finance community is very vibrant and there is strong loyalty and mutual respect between other corporate finance professionals, private equity firms, debt providers and lawyers. You could be working with someone on your side of the deal one minute, but be on the other side of the table and negotiating with them on the next transaction,” Thomson said.

A collaborative strategy saw HMT join the International Corporate Finance Group, a global network of likeminded corporate finance mid-market specialists “ICFG brings extensive cross-border capabilities and enables member firms to share best practice. It gives us access to overseas buyers and adds a significant string to our bow,” he said.

Time to celebrate

A 30th anniversary party at Somerset House in London at the end of 2022 for staff, clients and contacts had been preceded by a special event for staff at the prestigious Cliveden House.

The ever-consistent Thomson picked up his fifth Corporate Advisor of the Year award in 2022. Known for being a tough negotiator, who counts shooting and rugby among his passions outside work, Thomson’s hit rate is high with personal involvement in 300 deals over the past three decades. Little surprise, then, that his clients often say they are happy to be on his side of the negotiating table.

For more information click as appropriate: Corporate Finance, Debt Advisory, Due Diligence

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athomson@hmtllp.com

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