THE ESSENTIAL INFORMATION TO ACQUIRE IN A MERGER OR ACQUISITION (OUTSIDE OF THE FIGURES)

Mergers and acquisitions present firms with the chance to generate new revenue streams, build client portfolios and garner long term profits, and could be a strategy that many firms will look at during or post COVID-19. For mergers and acquisitions to be successful, however, a number of variables need to align. 

If you’re considering a merger or acquisition as part of your accounting firm’s growth strategy following a shaky start to the year, there’s quite a complex process to navigate before you can make the milestone announcement in months to come. 

Having facilitated dozens of mergers and acquisitions between accounting firms, there’s a few considerations I recommend you take before you enter formal negotiations. If it’s your first foray into the M&A arena, take a look at this sample of factors to explore that go beyond the P&L and balance sheets. 

Culture fit

The bottom line isn’t the only line to draw in the sand. Culture fit is important if two companies are going to merge and should certainly be considered as part of an acquisition strategy as well. 

If your firm values and prioritises contribution, but another is focused solely on revenue and profits at all costs, there will be a significant misalignment in culture. This affects not only the way budgets are spent, but the reputation of the firm in the market and how current team members are impacted. Employees are the lifeblood to any firm, so while it’s important to seek firms that will fill any skills gaps, it’s just as important to have a synergy between the two teams. 

Make sure your values and vision are compatible. 

Your office or mine?

In the case of a merger, how will you decide on which office to operate from? Will you keep the two premises as a growth strategy, or will you streamline expenses and move into one of the existing offices? Deciding where to continue your business must factor in employees, clients, rental costs and other costs associated with moving and re-establishing servers, IT, desks and more. 

Real estate is a key consideration in M&As and should be discussed early in the fact-finding stages. 

Technology and systems

Thinking about servers and desktops is just one part of the tech check. Building digital capabilities has become a significant driver of M&As, so be sure to seek out policies and procedures around cyber security, data privacy, cloud-based reporting, storage and more. How will the technology and data integrate seamlessly in the merger or acquisition?

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Mergers and acquisitions offer viable opportunities for participating parties to scale or cash in on their efforts, but the fit needs to be nice and snug. When you enlist the support of a mediator, they can help you identify suitable firms, establish meetings and agendas and enter negotiations to ensure all parties benefit from the arrangement. 

3113 Consulting can help you navigate the complexities of mergers and acquisitions to ensure you meet with suitable firms, obtain the information you need at the time you need it, and negotiate effectively to come to mutually beneficial terms. I am personally available to you to discuss the process and help you decide if this is the best strategy for your firm. Email me on [email protected] to arrange a virtual meeting.