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Deal Structure

A Two-Stage Solution to Succession Procrastination

Originally published in Journal of Accountancy, October 2013
Deal structure provides a path to retirement for CPAs who fear a loss of control or income.
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Alternative Deal Structures for Succession

Originally published in the Journal of Accountancy January 2014
For CPAs in public practice, the path to retirement usually follows one of two roads - an internal succession or a sale to an external buyer, with the external route offering additional options.
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Mergers and Acquisitions of Accounting Firms

Originally published in The CPA Journal, December 2017 
Mergers and acquisitions are a typical way for accounting firms to grow, expand into new markets, build expertise, and provide for succession. But not all mergers are true combinations of equals, not all firms are ideal matches, and not all acquisitions are structured the same way.
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Pricing Issues for Midsize and Large Firm Sales

Originally published in The Journal of Accountancy, November 2014
It's no simple task for accounting firm owners to figure out how much they should be paid when they are looking to sell. The job is especially complex for firms with at least five owners.
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Pricing Issues for Small Firm Sales

Originally published in The Journal of Accountancy, October 2014
For CPAs looking to sell their accounting practice, it can be a big plus to be in a small firm. That's because small firms generally can command higher multiples than big firms, and external sales usually produce higher prices for accounting practices than internal ownership transfers.
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Seven Steps to Closing a Succession Sale

Originally published in Journal of Accountancy, December 2013
The key to a successful merger or acquisition is keeping the process moving. For firm leaders, there is rarely any item of greater importance than a merger they are pursuing. The adage time kills all deals is absolutely true with mergers.
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Bridging Compensation Gaps in a Merger

Originally published in the Journal of Accountancy January 2012
Accounting-firm mergers must overcome numerous obstacles. One of the most common—and challenging—involves compensation and benefits for partners and staff. Merging firms usually have differences in compensation levels, compensation methods and benefits packages. It’s crucial for staff and partner retention that the merging firms combine the varying systems into one without people feeling like they came out losers.
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The Great Mystery: How Do Billing Rates and Profitability Affect a Firm’s Worth?

Originally published in the Practicing CPA by the AICPA July/August 2011

When you are buying a CPA firm, historical profit is almost irrelevant. Even less relevant are the partner billing rates. What? How can that be? When establishing the value of any business isn’t its profitability the most important metric to consider? Isn’t partner billing rates the most important way to know if two firms are a good fit?
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Who Would Run Your Firm? Practice Continuation Agreements Help Plan For the Worst.

Originally published in the Journal of Accountancy by the AICPA February 2011
There comes a time when every sole practitioner or small firm owner needs to consider the consequences of a disruption in leadership of his or her CPA practice. Illness, disability, family obligation or death can be devastating for the CPA’s clients, family and employees. Proper planning, however, can mitigate the consequences.
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Untying the Knot: Planning for a De-Merger

Originally published in the Journal of Accountancy by the AICPA October 2007
Celebrity divorce is often the cause of rampant public speculation, especially if a prenuptial agreement is not in effect. while a pre-nup agreement is an obvious necessity to some, planning for divorce is rarely at the top of anyone’s list when entering into marriage. Similarly, when two accounting firms agree to merge, they focus on the deal’s positive aspects and invest significant time in due diligence to ensure the merger will be successful. But having a sound de-merger agreement in place may also be a prudent part of the merger planning process
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Understanding the Market for Accounting Firm Mergers and Acquisitions

Originally published in the MNCPA Footnote Dec06/Jan 07
What are the factors that are driving what seems to be an unprecedented level of activity in the accounting profession for mergers and acquisitions? How are deal structures being affected?
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The Cull-out Sale: Partial Retention of a Practice

Originally published in The CPA Journal by the New York State Society of CPAs November 2006
Many professionals think of their transition to retirement in black-in-white terms. However, there are a plethora of ways to address succession that allow professionals to make a change in their organization and career short of the finality associated with an outright sale. One option is a cull-out sale.
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Two-Stage Deals

Originally published in the Journal of Accountancy by the AICPA March 2006
Most accounting owners understand it takes time to properly transition their loyal client base to a successor firm. Regardless of this fact, most delay as long as possible creating a succession plan. The Two Stage deal enables partners in all size firms to maintain reasonable autonomy, control and income while commencing a transition plan. At last an answer is found!
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Tax Considerations When Buying or Selling an Accounting Firm

Originally published in New Jersey CPA January/February 2006
Whether you are selling or buying an accounting firm, no proposal is truly complete until each party understands and agrees on the treatment of payments for tax purposes.
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