Tax and Accounting Firm M&A: Performing Due Diligence

This webinar will discuss the due diligence process for M&A involving CPA firms. Our panel of astute transaction advisers will cover the history and current trends in accounting firm M&A, critical succession planning considerations, deal structuring, and the tax implications of these arrangements.

Performing due diligence for M&A is a multi-faceted process. There are unique considerations when these acquisitions involve accounting and tax firms. While accountants might be familiar with financial statement audits, performing due diligence is a distinct and often foreign process. Due diligence is the careful process by which you confirm that you are getting what you pay for and are not accepting unnecessary risks and liabilities.

Due diligence should always include financial, tax, operational, and risk assessments. For CPA firms, as well as other professional service providers and service companies; however, their people might be considered their most valuable asset. Understanding the practice niches and billing structure of a target company is critical for buyers, as is the state of the files and working papers. Furthermore, understanding what you can and cannot do to retain employees is also critical. Also, understanding the lack of restrictions on employees that choose to exit the company after the transaction also is critical. For sellers, investing in due diligence could reduce risks and realize a greater selling price. Both buyers and sellers are concerned with the tax implications of the arrangement.

There are steps that acquirers and target firms can take to facilitate the transition. Appropriate documentation and a valuation should be obtained and analyzed, and the tax impact of the agreement on the buyer and seller should be determined. Steps to integrate the companies post-transactions must also be considered.

Listen as our panel of M&A experts explains performing due diligence for tax and accounting firms and offers pre-planning advice to facilitate these acquisitions.