MERGERS & ACQUISITIONS

Letters of Intent Require More Than ‘Good Faith’

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Generic business letter of intent

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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Maksymiw: Kick the “Should” Out of Your Career | Big 4 Transparency

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“Being efficient got me more work, not more money. So I left.” 

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Big 4 Transparency
By Dominic Piscopo, CPA
For CPA Trendlines

When Mike Maksymiw first joined the Big 4 Transparency podcast, listeners were struck by his candor, clarity, and willingness to challenge the profession’s long-standing norms. Now, as host Dominic Piscopo welcomes him back as the show’s first repeat guest, Maksymiw brings even more insight—this time shaped by Aprio’s rapid growth, his own unconventional career path, and a message for accountants who feel stuck in roles that no longer fit.

MORE Dominic Piscopo | MORE Private Equity | MORE Pay & Compensation

Maksymiw currently serves as executive director of the Aprio Firm Alliance, a national network of nearly 100 firms that share resources, expertise, and support across specialties and geographies. And—thanks to Aprio’s recent acquisition of the PS Plus Alliance from RSM—the Alliance has nearly doubled in size.

“It broadens how we can go find answers,” he explains. “Now there are a hundred people you can ask, and maybe fifty have done what you’re trying to do. Maybe there are seven different ways to make it work.”

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Beware Potential LOI Issues

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Model train derailed as model workers look on

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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Think About This Before Issuing a Letter of Intent

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Generic business letter of intent

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 →

If You’re Thinking Merger, You Need Data

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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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