Helping Your Client Through a Merger, Acquisition, or Sale

If your client is engaged in a merger or acquisition or is looking to sell their business, they will look to you for your expert guidance. As a PA accountant or CPA, you will be asked to provide due diligence, evaluate financial risk, ensure compliance with laws and financial regulations, assist in valuation, and provide all necessary reporting.

Be upfront about your expertise, fees, and time commitment, especially if you cannot drop everything to work on this. Make sure you manage your client’s expectations, honestly explaining the steps involved, what other experts may be needed, what you will need from your client, and what your client can expect from you.

Work with the client on collecting necessary data and financial records from any and all companies or individuals involved–taxes, financial statements, debts, assets, and liabilities. Other information may be needed for other experts whom you may engage.

Depending on the size of the company and the type of transaction being sought, you will probably call on a variety of experts to help with the various steps in the process. But you will be the center of the wheel, the leader of the team of experts, to ensure that all of them are working in coordination for the benefit of your client.  Some experts may include:

• Legal counsel to prepare and review contracts and address legal issues
• Business appraiser to provide a fair valuation of the company
• Investigator to evaluate the buyer or potential merger/acquisition partner
• Business broker to find a buyer or a candidate for a merger

Your responsibility will be to ensure that the experts receive all the information needed to perform their functions, to make sure they perform their work in a timely manner, and to coordinate and manage the information as it is delivered to you.

Discuss the results with your client. Identify any red flags that you see. Be honest and transparent; your client may be set on a merger, but the investigation may reveal serious questions about its future success. It is your job to inform the client fully, to evaluate risk, assess stability and growth opportunities, and to provide guidance on best practices through the transition. Your client may ignore your advice, but if you have given clear guidance, including in writing, you have performed your duties.

You may also recommend upgrades to make the business more attractive and increase its value, such as upgraded technology, building repairs, or improved procedural efficiency to streamline operations. If your client wants to keep any assets, such as a company car, help him or her legally transfer the assets to personal ownership.  

After the merger, acquisition, or sale, you are in an advantageous position to provide support for the new company or new owner. Since you have a deep knowledge of the company and its past financials, you can be an invaluable resource for the new leadership, providing them with ongoing financial support and wisdom from your past work with the company in order to help them grow into the future.