Buying a business is a high-risk endeavor. In fact, some commentators believe that it is the riskiest type of transaction that most business people will ever face in their careers. Many factors can create risk, and ultimately they can result in a failed acquisition if they have not been identified in advance. When acquiring a business, you want to work with a CPA firm that has extensive experience in these types of transactions.
Sisterson can help you evaluate projected cash flow, proposals for bank financing, business synergies, and your maximum purchase price. We can perform due diligence and dig for information that can help you to evaluate risk. You can be sure that all of the tax issues will be identified and dealt with, and that we know how to work alongside legal counsel from the time due diligence begins, in drafting of a letter of intent, in hammering out the last minute details of the sales agreement, right through the time that escrowed purchase price is finally released after satisfaction of all claims against the seller.
Sisterson is a firm that is deep with business acquisition experience. We know where to find hidden tax traps. We have extensive experience in tax issues such as choosing the legal form of the acquiring entity, the allocation of purchase price, amortization of purchase price related to intangibles, purchase money indebtedness, employment contracts, methods of accounting, inventory accounting (including LIFO issues), and a plethora of other related tax matters.
Because of our experience, we also understand that contingency plans must exist with respect to a business acquisition. Sometimes all or a part of the transaction must be unwound or sold off in advance of the timetable that was originally contemplated. Unlike some advisers, we try to consider the tax consequences of contingencies in the tax structure of the original transaction. Moreover, we’ve found that it also pays to consider the client’s exit strategy in every business acquisition, because in today’s business environment, the ability to move swiftly in and out of markets is important. Only the inexperienced adviser fails to consider how a client will eventually exit an acquired business.