When each is most common.
By Marc Rosenberg
CPA Firm Mergers: Your Complete Guide
After settling financial and operating issues, we turn to two-stage vs. one-stage mergers.
MORE: Buying a Solo | 23 Questions for Mergers of Equals | Selling Your Firm? What to Expect | One Times Fees Isn’t the Only Way | Four Reasons to Fear a Merger
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In the end, it’s all about the math.
BONUS: A 19-point checklist for sellers.
By Marc Rosenberg
CPA Firm Mergers: Your Complete Guide
NOTE: This post was written in collaboration with attorney Peter Fontaine, the founder and managing partner of NewGate Law, a firm of lawyers that work with CPA firms exclusively. He served as legal counsel at Arthur Andersen and RSM for more than two decades. He can be reached at pfontaine@newgate.law or (617) 513-2440.
At the onset of the merger process, most sellers contact at least two to three potential buyers. This positions the seller to select one buyer to commence negotiations with, in earnest.
MORE: Buying a Solo | 23 Questions for Mergers of Equals | 61 Things Buyers Should Explore with Sellers | Why Merging in Smaller Firms Is Fabulous | Selling Your Firm? What to Expect | Thirteen Ways to Woo Potential Firm Buyers
After an exchange of financial and operating data and meetings to clarify the information, but before serious negotiations begin, it is customary for the qualified buyers to issue letters of intent (LOIs).
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What to negotiate, plus key operating and financial issues.
By Marc Rosenberg
CPA Firm Mergers: Your Complete Guide
The approach to orchestrating a merger differs depending on the nature of the transaction. Is there a true survivor? In substance, not form, is the deal more an acquisition than a true merger?
MORE: 23 Questions for Mergers of Equals | 61 Things Buyers Should Explore with Sellers | Thirteen Ways to Woo Potential Firm Buyers | One Times Fees Isn’t the Only Way | Four Reasons to Fear a Merger
When a sole practitioner is the seller, virtually all deals are true acquisitions. Solos intend to retire in just a few years. Their primary focus is on the negotiation of financial terms, such as the purchase price, payout term, down payment and compensation for the time they work. Issues related to the operation of the buyer are generally of minor importance to the solo. In other words, when a buyer acquires a retirement-minded solo, the transaction is fairly simple and straightforward.
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What do you want, and who will manage getting there?
By Marc Rosenberg
CPA Firm Mergers: Your Complete Guide
Mergers of equals or firms close to equal (some call these sideways mergers) are much less common than mergers in which there is a clear survivor. But they do occur.
MORE: 61 Things Buyers Should Explore with Sellers | Why Merging in Smaller Firms Is Fabulous | 13 Reasons to Merge Up | Thinking Merger? First Ask Why.
There are two reasons that mergers of equals are rare.
First. Mergers of equals are much more difficult to negotiate. In traditional mergers where there is a clear surviving firm, the buyer is in a strong position to dictate the deal terms and governance policies, and the seller respects this.
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Everything from reporting to décor.
By Marc Rosenberg
CPA Firm Mergers: Your Complete Guide
Here we list 61 issues with mergers and acquisitions, and additional items will undoubtedly arise on a case-by-case basis.
MORE: Why Merging in Smaller Firms Is Fabulous | Selling Your Firm? What to Expect | Merger? The 100 Data Points You Need First | Why Do You Want to Merge? Be Honest.
If a buyer pursued every one of these issues, it could take years to negotiate the deal and would ensure severe deal fatigue. So as you review this list, prioritize what issues are most important and customize these questions to the seller’s unique situation.
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