Why and How to Merge

Source: Partner Insights 

In this article, August Aquila discusses reasons why firms merge and offers guidelines for improving the chances for success. Firms may merge to: 

• Increase size
• Acquire special talent
• Enter new markets
• Gain market share
• Achieve a smooth succession to the next generation of owners
• Bring needed capital into the firm

To identify the ideal merger candidate, firms should identify the primary reasons for seeking a merger and evaluate potential candidates in terms of:

• Size
• Service mix
• Client types and sizes
• Billing rates
• Location
• Client service
• Billings and collection
• Culture
• Profitability 

Aquila also discusses traits to look for in a merger candidate. To improve the chances of success, he advises firms to address “deal breaker” issues early in the negotiation process. To identify deal breaker issues, as questions such as:

• Will all partners come across in the merger?
• Will all staff be hired?
• What will happen to clients?
• Are the two firms compatible? 

For the original article, read “Merger Mania – What you need to know.” 

From Partner Insights, Aquila Global Advisors, LLC, January 2014, http://www.aquilaadvisors.com.