The upward tick of advisory firm mergers and acquisitions activity has continued its record pace through the first half of 2020. The 80 total transactions are 7% more than the previous record of 75 deals announced during the same period last year and 11% above the annual total achieved less than three years ago in 2017 (FA Insight, 2020)!

Often essential for a company’s revenue column, mergers and acquisitions must be done correctly to ensure that post-M&A creation is as profitable as pre-M&A activity. After all, why conduct the M&A if there wouldn’t be any significant gains?

We’ve curated some helpful tips (best to be contingency planned) in order to create successful mergers and acquisitions outcomes:

Tips for a Merger:

Understand What Best Aligns with Your Needs and Goals

A common reason firms pursue mergers instead of acquisitions is to acquire the partner level talent. An acquisition normally is an exit strategy for the partners who are bought out of their equity. The key thing to consider when pursuing a merger is the role of the owners at the acquired firm after the deal. If a practice is expecting a long-term role for the partners of the practice it is pursuing, a merger is often a better approach than an acquisition.

Think About Perspective

During a merger, the interests of both companies are combined, and the two become a single, stronger unit. From a legal and practical perspective, however, one party is almost always deemed the acquirer and the other the acquiree. If they don’t clearly communicate the go-forward strategy, employees of the acquiree will get nervous, and, as a result, some of the top talents may decide to leave.

To prevent that from happening, make sure all parties understand how the new company strategy will benefit everyone, incorporating all the necessary talent.

Bring in An Experienced, Neutral Leader

In many transactions, both companies will choose an internal executive to lead the M&A effort and appoint this person prior to the announcement. In our experience, however, it’s more effective to select a knowledgeable, neutral interim executive or an M&A leader external of both companies. This gives the companies access to someone with deep M&A integration experience and an unbiased approach to the strategy, process integration, organization design, change management, and IT support structure of the joint company — not to mention a neutral view of what might otherwise devolve into a highly politicized process.

Keep Culture on Your Side

Differing company cultures can be quite a large hurdle to overcome, especially without access to a change management expert who understands the differences and can provide insight into approaches that would benefit both parties as a whole. Getting the people side right, especially right from the start, enables you to create influencers whose contributions can ripple through the integration process. That’s especially true when someone who was once opposed to the change becomes a supporter and helps drive synergies across the company.

Tips for an Acquisition

Perform a Culture Audit

Every business has their own culture, values, work styles, and tactics. People looking to buy a business also have their own expectations for how the company should be managed, so there is potential for conflict even before a transaction begins.

To avoid or minimize the impacts of such potential conflicts, clear communication and patience are required for handling this process. Transparency will minimize the fears and anxieties of employees and clients. If the culture is not a good fit, don’t be afraid to walk away.

Verify Sound Finances on Both Ends

The seller and buyer must both be in a strong financial state. The acquirer should hire an accountant to examine the books and look for sustainable income, as well as any red flags. When acquiring a firm, consider the limit of how many clients can be lost while still keeping the deal solvent, learn and understand how the firm makes money, and study the sustainability of current income streams.

Examine things like the firm’s expenses, the compensation structures, overhead, and operating expenses. How likely will these remain flat or increase?

Create a Transition Plan

Once you have decided that you definitely want to buy, make sure the paperwork is reviewed by a lawyer with experience in acquisitions. Write down each party’s expectations. Also, make sure to Involve the staff and other advisors in this phase to ensure that they feel comfortable with the new organization. Items to consider include clearly defined employee duties, revised business practices, and hierarchy of employees. When all involved parties work together, you’re more likely to have a smooth transition!

e-Merge Program of Succession Link is a customized matching service for those interested in Merging or being Acquired. Our new e-MERGE Program provides concierge support through the entire M&A process, providing you with matches and introductions, so you can find the ideal long-term relationship that brings your company closer to your goals.

Check out, and learn more about working with us on your M&A agenda.


FA Insight. (2020). Mergers & Acquisitions Activity: 2020 Mid-Year Update. FA Insight.

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