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Seven topics for the first negotiation meeting.

By Marc Rosenberg
CPA Firm Mergers: Your Complete Guide

Mergers succeed in direct proportion to the effort made by both firms to

1. ask lots of questions,
2. agree on as many merger implementation issues as possible before the merger takes place and
3. openly share as much of their “dirty laundry” as possible to minimize surprises.

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Don’t assume anything. When you sit down for your first merger negotiation meeting:

1. Start the meeting by confirming and agreeing on the agenda.

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Fourteen provisions to include.

By Marc Rosenberg
CPA Firm Mergers: Your Complete Guide

Letters of intent should be drafted cautiously and with as much detail and precision as possible. This avoids potentially fatal misunderstandings or disagreements around key terms later in the process.

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An LOI is too often seen as a non-binding jumping-off point, with no real consequences. This is not exactly true. For starters, an attempt by one party to change a material term in the LOI can be characterized by the other party as an act of bad faith or a breach of trust, which can

• derail an otherwise healthy merger,
• give a party excessive or unwarranted leverage or
• reopen the entire negotiation.

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Eight ways to derail a merger.

By Marc Rosenberg
CPA Firm Mergers: Your Complete Guide

As you will see from reading these examples of issues I have seen arise at second meetings, touchy or sensitive items are much more easily dealt with before the letter of intent is prepared than after.

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The discussion at this second meeting steers the parties closer to a mutually acceptable transaction in the direction that the seller is looking for, thus minimizing contentious issues that often arise when an LOI is issued that amounts to a “stab in the dark” by the buyer.

Here are some agenda items for second meetings I have recently led:

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Five items for the second meeting.

By Marc Rosenberg and Peter Fontaine
CPA Firm Mergers: Your Complete Guide

For now, let’s define the letter of intent as a written offer made by the buyer to merge in or acquire the seller. (A thorough definition is given later in this post.) It is a relatively short, simple, non-binding offer, subject to

• further negotiations,
• performance of due diligence and
• a formal vote by the buyer’s partners.

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Before the LOI Is Prepared

The first meeting was the “get-to-know-you” meeting. The purpose of this meeting was simply to introduce each firm to the other, give each a chance to “kick the tires,” get a feel for the personality and style of the other and to share some very basic information, all of which is designed to help each firm decide if they wish to go to the next stage. READ MORE →

Seventeen data points you should exchange.

By Marc Rosenberg
CPA Firm Mergers: Your Complete Guide

I have always been a big believer in the buyer and seller exchanging financial and operating information as early in the process as possible. Numbers aren’t everything, but they do speak volumes. The data enables each firm to gain an understanding of the other in a manner that is not always possible in conversation.

The data is also a good way to corroborate things that are said verbally.

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Here are some examples:

• In conversation, the buyer says his realization percentage is “strong.” But the data show 82 percent, for which the word “strong” would never be used.

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