{"id":100978,"date":"2022-09-22t12:00:21","date_gmt":"2022-09-22t16:00:21","guid":{"rendered":"\/\/www.g005e.com\/?p=100978"},"modified":"2024-08-07t23:10:32","modified_gmt":"2024-08-08t03:10:32","slug":"twelve-tips-for-negotiating-mergers","status":"publish","type":"post","link":"\/\/www.g005e.com\/2022\/09\/22\/twelve-tips-for-negotiating-mergers\/","title":{"rendered":"twelve tips for negotiating mergers"},"content":{"rendered":"

\"four<\/a>plus: guarding against deal fatigue.
\n<\/strong><\/p>\n

by marc rosenberg<\/i>
\ncpa firm mergers: your complete guide<\/i><\/a><\/p>\n

after you\u2019ve identified a merger partner.<\/p>\n

after you\u2019ve convened a get-to-know-you meeting.<\/p>\n

after you\u2019ve exchanged financial and production data.<\/p>\n

after you\u2019ve received letters of intent,<\/p>\n

more:<\/strong> mergers: one stage or two?<\/a> | what your merger letter of intent needs<\/a> | 61 things buyers should explore with sellers<\/a> | thirteen ways to woo potential firm buyers<\/a> | one times fees isn\u2019t the only way<\/a> | four reasons to fear a merger<\/a>
\n\"goprocpa.com\"exclusively for pro members. <\/span><\/strong>log in here<\/a> or 2022世界杯足球排名 today<\/a>.<\/span><\/p><\/blockquote>\n

\u2026 now you\u2019re ready to get down to business! it\u2019s time to begin arguably the most critical of the dozen or so major steps in the merger process: negotiating the deal.
\nthe success of a merger is in direct proportion to the effort made by both firms to address all possible terms, policies and issues before<\/strong> the merger takes place. i\u2019m often asked, \u201cdo mergers work?\u201d my answer is always the same: \u201cyes. if you do them right!\u201d doing it right means being thorough, asking the right questions and giving it time.<\/p>\n

most firms seek lois from multiple firms, often two or three. this makes a lot of sense for sellers because it puts them in the enviable position of selecting the most attractive of several offers. in many cases, the multiple offers give sellers bargaining power when they tell one buyer candidate that another offered better terms. this often results in buyers modifying and reissuing their loi.<\/p>\n

here\u2019s a common scenario. based on prior meetings and conversations, the seller prefers one buyer over the others because there is a better personality and culture fit.<\/p>\n

but lo and behold, the lois come in, and their favorite firm offers somewhat less attractive deal terms than the front runner. this positions the seller to try to get its preferred merger partner to match the most attractive terms.<\/p>\n

once the seller decides which loi is most attractive, common practice is to negotiate in earnest with just one buyer. most buyers are not willing to invest the substantial amount of time it takes to negotiate merger terms if they know the seller is simultaneously negotiating with other firms and playing one against the others.<\/p>\n

after both firms sign off on the loi, they are ready to negotiate the deal. this step is not only key in terms of its significance but also more time-consuming than any other step.<\/p>\n

merger negotiations are the time when both parties drill down into the details and agree on terms, policies and next steps.<\/p>\n

every merger i\u2019ve ever worked on featured several meetings.<\/p>\n

    \n
  1. there are too many issues to address in one meeting. it\u2019s almost always better to convene several short meetings \u2013 say, two to three hours each \u2013 than to meet for an entire day, which is always tiring and tries everyone\u2019s patience and energy.<\/li>\n
  2. each meeting builds on the previous session. doing a merger is a really big deal for both firms. anxiety levels are high. the firms don\u2019t always think of everything they should ask and address at each meeting. the time between meetings gives each firm a chance to think about what was discussed at the previous meeting and form further questions to clarify terms and address nuances.<\/li>\n<\/ol>\n

    what to address at merger negotiations<\/h3>\n

    every meeting should have an agenda. it shouldn\u2019t be airtight and rigid, but to make the best use of everyone\u2019s time, it\u2019s best to list what needs to be accomplished at each meeting. it\u2019s always best to distribute the agenda for each session well in advance, giving each firm an opportunity to prepare for the items to be addressed.<\/p>\n

    the common thread to all that follows is this: a key to successful merger implementation is avoiding surprises after<\/strong> the merger is consummated. it\u2019s much easier to address merger issues during<\/strong> the negotiation stage than after the deal is done.<\/p>\n

      \n
    1. obviously, the terms in the loi are a good starting point. everything in the loi needs to be discussed in detail. in most mergers, everything in the loi is subject to negotiation. this is especially true where the buyer is smaller than $20 million. in cases where a large regional firm is acquiring a much smaller firm, the extent that loi terms can be negotiated is greatly limited. the buyer may not say this outright, but it\u2019s essentially \u201cthis is the deal \u2026 our standard terms to all sellers \u2026 take it or leave it.\u201d<\/li>\n
    2. though the most negotiating time is usually devoted to the deal terms (price, payout term, down payment, compensation, etc.), many other areas generally not<\/strong> included in the loi need to be addressed:<\/li>\n<\/ol>\n