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Mergers and Acquisitions

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1. How to value a CPA firm for sale  

BY Joel Sinkin and Terrence Putney, CPA
One of the key components of a CPA succession plan is the sale or transfer of the retiring CPA’s ownership interest. How is the value of that interest determined? In most circumstances, the value of an owner’s interest is different when selling to an external buyer than it is in an internal transaction.EXTERNAL SALESThe most common question about accounting firm sales the authors are asked when teaching CPE courses is “What is the multiple (of billings)?” The multiple is determined by four main factors:1.

2. Bridging compensation gaps in a merger  

BY Joel Sinkin and Chris Frederiksen, CPA
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.

3. The CPA's Role in Quantifying Post-Acquisition Dispute Damages   CPEDirect

BY Jeff Litvak, CPA/CFF/ABV, Kenneth Mathieu, CPA/CFF/ABV and G.William Kennedy, CPA/ABV, Ph.D.
Given today’s environment of bankruptcies, bank failures and recessionary pressure, consummating merger and acquisition transactions is more challenging than ever. The potential disputes arising from the challenges of an M&A transaction are numerous. The following two types of disputes are the focus of this article: working capital disputes regarding whether the financial statements were in accordance with GAAP; and indemnity claims involving whether the buyer in the transaction obtained the benefit of the bargain.

4. How to Get Experience in M&A-Related Disputes  

Editor's note: This is a sidebar to "The CPA's Role in Quantifying Post-Acquisition Dispute Damages," March 2010. Most CPAs with an accounting and auditing background have advised a client who has acquired or sold a business or business interest. Disputes may arise related to the M&A transaction as outlined in the accompanying article.

5. Managing Corporate Divestiture Transactions  

BY William J. Gole and Paul J. Hilger
EXECUTIVE SUMMARY Corporate divestitures, the sale of stock or assets of a segment of a business, are an important class of business transaction by virtue of their pervasiveness (more than onethird of all M&A activity in a given year) and their size (averaging more than $175 million per deal).
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