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Merging an Accounting Firm

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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Roadblocks to Avoid in Accounting Firm M&A

Originally published in the Journal of Accountancy, September 2015
Whether you are buying or selling, these tips can help you navigate the potential pitfalls on the road to closing the deal.
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Mergers & Acquisitions of CPA Firms: Understanding the Roadblocks To Successful Deals (Part 1 of 2)

Originally published in the Journal of Accountancy, March 2009 
Despite the best intentions of all involved parties, some CPA firm mergers and acquisitions are not as successful as originally planned; indeed, some end as failures. When viewed in perfect hindsight, it often seems that simple common sense, or lack thereof, was the reason for the success or failure of a deal. Unfortunately, there is no specific formula for structuring a perfect deal, but a good understanding of the potential hazards relating to the variables involved and planning for the unexpected can help your firm prepare a better deal structure and business plan.
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Seven Steps to Closing a Succession Sale

Originally published in Journal of Accountancy, December 2013
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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Mergers Emerge as Dominant Trend

Originally published in Journal of Accountancy, July 2013
Powerful forces are transforming the accounting profession in the United States. The Baby Boomers are heading into their retirement years. Baby Boomer CPAs are in charge of most U.S. accounting firms. And most U.S. accounting firms don't have a signed succession or practice-continuation plan in place.
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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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Considering an Acquisition

Originally published in Professional's Corner CCHGroup.com/Partners Spring 2011
After the death of his partner in Hevia Beagles & Co., Dan Hevia continued the practice as sole owner. As time passed, the St. Petersburg, Fla., CPA found that running a six-person firm on his own was daunting. It wasn’t just the burden of carrying all decision-making responsibility. Hevia had no one to share the cost of long-term investments in equipment, marketing and training — investments he needed to keep the firm healthy until his planned retirement, still nearly a decade away. Besides, how could he plan that retirement with no partners to succeed him?
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Good M&A Deals Start with Strong Leadership

Originally published in the CPATrendlines.com November 2010
The characteristics of the firms we work with that are the most successful are found in their leadership. The most agile firms have strong leaders that are able and willing to make informed decisions quickly. Firms that cannot make decisions quickly find that M & A opportunities pass them by.
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Succession Planning: What Are the Roadblocks in Most Mergers? Is Anything "Easy"?

Originally published in the June 2010 CPA Practice Management Forum, a monthly journal published by CCH, a Wolters Kluwer business
After being involved with hundreds of mergers and acquisitions of accounting firms over the past 20 years, we have found a trend: the bumps in the road are the same whether the mergers are between firms of equals or a smaller firm is merging into a larger one. Conversely, some surprising things are not as hard to overcome as one might think.
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When Should a Small Practitioner Merge Into a Larger Firm?

Originally published in Small Firm Solutions, 2009 
Most sole practitioners and small firms are that size for a reason: They prefer to be. Additional accountability, shared control and many other facts of life in a larger multi-partner firm can be daunting prospects. But sometimes there are good reasons for small firms to consider an upstream merger. If you ever wonder what you’re missing by staying small, here’s a review of the reasons for merging and the best way to handle a transition.
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Current Trends Surrounding M & A of Accounting Firms

Reprinted with permission from Inside Public Accounting December 2007
Mergers are still the rage today just as they were 10 years ago. But now, instead of larger firms looking to buy smaller ones, it’s far more common to see smaller firms taking the imitative and seeking to merge “upstream.”
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Mergers of Accounting Practices

Originally published in Today’s CPA November/December 2007
Mergers remain an area of extreme interest for many public accounting firms. Should your firm be considering a merger? If you are already pursuing mergers, how can you be better prepared to be successful? This article will provide you with an overview of the rationale for mergers of accounting firms and some key points to keep in mind as you pursue this strategy for your firm.
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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 prenup 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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Roles Of Partners, Equity And Compensation Stand Among The Top Considerations When Mergers Serve As Succession Solution

Reprinted with permission from Inside Public Accounting November 2005
Succession planning is one of the most urgent issues facing accounting firms today. While firms often look for internal solutions to succession, mergers and acquisitions are alternative solutions.
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Ready to Merge?

Originally published in Insight, the magazine of the Illinios CPA Society July 2003
That's the question facing many CPA practices...trust your instincts to find the right answer.
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