Adamy leverages succession experience as it expands
Business valuation firm understands the difficulty of transition.
Since its establishment, Adamy Valuation Advisors has adapted to the growth of valuation services and continues to expand its operations with a new partnership in a Northern Michigan market.
Adamy Valuation is headquartered in downtown Grand Rapids at 50 Louis St. NW. It was originally founded by Rick Adamy in 1979 as an accounting firm known as Adamy + Co. PC. The firm became an independent business valuation firm in 2008 after experiencing significant growth in the market.
Nick Adamy, managing director of Adamy Valuation Advisors, said the firm established by his father was among the first to specialize in business valuation in West Michigan.
“He had a couple of contemporaries that kind of grew up with him as competitors in the market. It became a larger and larger piece of the accounting firm practice, to the point, in 2008, we carved out valuation and sold the accounting firm,” said Adamy.
“We are now a 10-person valuation firm. We figure out what companies are worth for a variety of purposes.”
The firm provides companies and auditors with valuation or appraisal analyses in various areas, such as financial reporting, litigation support, mergers and acquisitions, divorce, succession planning, tax-related valuation and employee stock ownership plans.
“We are not consultants; we don’t do taxes; we don’t give legal advice; we don’t broker deals. Instead, we provide an independent opinion of value. Most of the time it is for situations or transactions that would fall under third-party scrutiny,” said Adamy.
“If a shareholder needs to be bought out, we will be the independent third party who figures out the fair market value of the shares, and that takes us all the way into the courtroom as a corporate witness or may be resolved outside of court,” he said.
While the firm’s staff members are not considered succession planners, Adamy said a lot of the work they do is related to businesses transitioning from the founder or second-generation owner to the next age group.
“Working with those businesses and seeing our peers in the valuation profession, along with other professional service firms, we realize just how hard it is — particularly, for a relationship-based service firm — to transition leadership from the founder who the business was built around,” said Adamy.
Although the valuation practice began as an accounting firm, Adamy said since the profession was newer than accounting or law, the market demand and growth in the last 20 to 30 years has exploded.
“We have grown with that market from something that used to be just a sideline in an accounting firm to something that supports an entire business,” said Adamy.
The practice recently announced it has partnered with a Traverse City-based valuation firm, Warren Cline PLC, to expand its presence in the Northern Michigan market. Adamy had partnered with the firm’s owner, Warren (Bud) Cline, in the past to provide economic research and staff support on valuation projects for Northern Michigan clients.
“Bud happened to have too much work on his plate all of a sudden, and that really was the catalyst for us to explore working together,” said Adamy. “He worked with our staff to get that work done … and led us to continue to talk about how we could take that one or two steps further to the point of providing him an opportunity to exit valuation while knowing his clients were well served.”
Adamy Valuation’s formal partnership with the Traverse City-based firm will allow Cline to focus on the consulting and strategic planning side of his practice, while Adamy provides valuation services to customers in the Northern Michigan area.
In response to the partnership, Cline said he looks forward to transitioning from preparing traditional valuation reports to focusing on business value and transaction consulting, such as mergers and acquisitions, for area business owners.
“It was extremely important to me to find a firm with the right culture and resources to serve my clients,” said Cline. “Additionally, I wanted a firm that will work well with the Northern Michigan CPA firms who frequently refer their clients to me. Adamy’s practice, like my practice, is a resource for local CPAs, attorneys and financial advisors who need to refer a client to a valuation expert.”
Adamy indicated another reason behind partnering with Cline began after the Grand Rapids-based firm completed its own succession plan. It recently transitioned ownership and leadership to Nick Adamy from his father, Rick, and was interested in working with solo practitioners nearing retirement who didn’t necessarily have an exit plan but had clients they wanted to ensure were well taken care of.
“As we explored the idea, we also got to know Bud Cline, and Bud is someone my dad has known for at least a couple decades,” said Adamy. “He is someone who has a fantastic reputation in serving the Northern Michigan market and has impeccable values and ethics that we respect.”
Adamy Valuation has been sending staff members to Northern Michigan to meet in person with Cline’s clients, and it plans to continue visiting customers in person.
“The key is having that presence in the market. When we compete with out-of-state firms, we have gotten used to being the local player and we don’t want to be arrogant about serving a new market and think we can do it remotely,” said Adamy.
“We go up there to visit clients and we do the same thing for our out-of-state clients.”
Adamy Valuation works with middle-market and lower-middle market companies representing a “broad cross-section of the Midwestern economy.” Nearly 20 percent of the work the firm provides is to companies outside of the state of Michigan, according to Adamy.
“We are pretty glad we can do that out of Grand Rapids and be serving clients all across the country, and bringing some of that revenue back here to this community,” said Adamy.