Merger Checklist

Source: Partner Insights

August Aquila presents a checklist to use before merging with or acquiring a CPA firm. The following includes excerpts reproduced with permission:

How will the merger help you achieve your strategic vision? If you can't answer this question, there is no reason to do the merger.
Someone in the new firm will need to be a leader. Perhaps you are a good manager. If that's the case, then look for a good leader. If both firms lack leadership, don't do the merger.
What is the name of the new firm? The number one deal breaker for many mergers.
Who will be the managing owner? Sharing power normally does not work.
Will there be an executive committee? Who will be on it? What are the terms? What powers will it have?
Does the new firm's compensation system motivate the owners? How different is yours from theirs?
What is the gap in compensation between the two firms? If your firm is more profitable or if the range between the lowest paid owner and the highest is larger than their range, how will this issue be addressed?
Make sure you agree on how capital will be provided for the combined firm.
Communicate with key people as soon as possible. Decide early who are the keepers in the new firm and make sure that you hold on to them.
One way to keep people is to offer them a "stay bonus." This is a bonus that is paid at the end of the first year.
Have you developed a 12-month forecast? Savings that you thought were there will disappear or take longer to materialize.
Finally, are there any deal breakers? You need to get them out as soon as possible.

For the complete article, click here and read "Merger Checklist for Managing Partners."

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