The first step in the buying or merging an accounting or CPA firm is to determine an acquisition strategy based on specific goals and objectives. Each strategy has specific marketing, valuation, negotiation, pricing, transaction and legal requirements for structuring the transaction. The first step is to analyze the Buyer’s motives for expanding their practice.
Motives for Buying a Practice:
- Gain market share quickly and efficiently
- Add new services; financial planning, information technology, consulting, value niches, and investment advisory services
- Acquire and attract professional talent and potential partners
- Attract superior clients with greater resources
- Increase the value of a practice for subsequent merger or sale
- Increase cash flow, economies of scale and profitability
Common Acquisition Strategies:
- 100% Acquisition – Buying 100% of the equity with the existing partners staying on anywhere from one to three years.
- 50/50 Acquisition – Purchasing 50% of the equity now and the other 50% when the partner (s) retire in three to seven years.
- Partner Buy-Out – Buying out one, or more, of the retiring partners’ interests (less than 100%) while the other partners merger into the firm in exchange for equity.
- Merger – Two firms joining resources, not necessarily exchanging any cash, and redistributing equity for long-term growth, market share and exit strategy.
We have closed 100s of deals and have “case studies” to share with our clients to determine the optimal structure for your deal. Call us, or use our Live Chat, to find out more.