Beyond Synergies: Building a Structured Value-Creation Plan Before You Sign the LOI

More than 70 percent of M&A transactions fail to deliver their anticipated strategic and financial value within three years, according to PwC and Mergermarket research. In professional services, PwC classifies only 14 percent of transactions as achieving significant success across strategic, operational, and financial measures. The accounting profession is completing deals at the fastest pace in its history, yet the underlying failure rate hasn't improved. That gap needs to be addressed.

The most consistent finding across the research is that firms entering a transaction without a structured value-creation plan produce worse outcomes than firms that build one before the letter of intent (LOI) is signed. A synergy list, deal model, and integration checklist started the week after closing all share the same fundamental limitation: they are reactive instruments in a discipline that rewards firms who are proactive. Value creation in M&A requires a plan built before the LOI goes out, not assembled from the wreckage of closing.

Synergies vs. Value Creation

A synergy list and value-creation plan are distinct items and should be treated as such. A synergy list is a set of assumptions built to justify a purchase price. It identifies expected cost reductions, projected revenue combination, and capital efficiency gains, typically at a level of abstraction that satisfies a deal model without obligating anyone to deliver a specific outcome. BCG's research on post-merger synergy realization explains that revenue synergies are typically defined at a high level, which means investors place less confidence in them, and acquirers have no mechanism for tracking them systematically. The synergy number gets embedded in the deal rationale, and the integration team inherits an aspiration rather than an accountable plan.

A value-creation plan operates differently. It specifies who will do what, by when, with what resources, to produce a measurable outcome. It addresses how the combined firm will be stronger than either entity was independently in operational and client-facing terms. The firms that consistently produce strong outcomes from acquisitions have built that plan before they signed the LOI, and they use it to run the integration.

The Pre-LOI Work That Matters

Building a value-creation plan before the LOI requires doing a different kind of analysis than financial due diligence. It requires validating the deal thesis against operational reality rather than against projections.

If the thesis is cross-selling access to the acquired firm's client base, the pre-LOI work examines what that client base actually looks like in terms of advisory readiness, relationship depth, and complexity. A revenue synergy assumption based on introducing your firm's CFO advisory services to the acquired firm's client base is meaningfully different depending on whether those clients are owner-operated businesses with complex planning needs or seasonal tax clients who engage once a year. The assumptions need to be stress-tested against the real client profile before the purchase price is set around them.

If the thesis is talent acquisition, the pre-LOI work identifies which individuals make that thesis viable and what their retention actually requires. A capability that lives in a platform, documented and distributed across a team, transfers reliably. The capability that lives in two partners who joined the acquired firm three years ago and have options elsewhere is a retention problem that should be addressed in the deal structure, not discovered post-close.

If the thesis is geographic density or service line expansion, the pre-LOI work maps the specific client and referral relationships that generate that geographic or service value and identifies the transition risks in each. By 2025, 60 percent of high-performing acquirers were beginning this integration planning during due diligence, up from 25 percent in 2019. That shift reflects accumulated experience about what the gap between assumption and outcome costs in practice.

Protect the Base Business

One of the most consistent and least discussed findings in M&A research applies directly to accounting firm acquisitions: acquirers typically see revenue decline in the quarter after announcing a deal. Management attention shifts to integration, client-facing partners are pulled into internal meetings, and the communication vacuum that forms between announcement and close creates uncertainty that competitors move into.

A value-creation plan addresses this explicitly. It assigns clear accountability for current-year performance alongside integration responsibilities rather than allowing integration to consume everyone with any capacity. It sequences client communication so that key relationships are managed proactively before uncertainty creates its own narrative. It identifies the client relationships at highest attrition risk and assigns specific owners to manage those relationships through the transition window. In professional services, where client relationships are personal and trust transfers slowly, the base business protection plan is the integration plan's most important component in the first 90 days.

Build Accountability In

The measurement framework should be built into the value-creation plan before the deal closes. Research on what separates high-performing acquirers from average ones points to measurement as a key differentiator. BCG found that acquirers who disclosed actual synergy realization after a deal announcement produced approximately six percent higher relative total shareholder return over the subsequent two years than those who did not. The mechanism is accountability: when specific people own specific outcomes with specific timelines, the probability of delivering on the deal thesis improves measurably.

For accounting firm acquirers, the framework covers three windows that should be defined in the value-creation plan before close. At 90 days: have the highest-priority client relationships been successfully introduced to the combined firm in a way that reduces attrition risk? Are the partner and staff retention plans producing the expected outcomes? Are the early cross-sell conversations generating a qualified pipeline? At 12 months: is combined revenue tracking against the deal model, and where are the gaps between the synergy assumption and the operating reality? At 24 months: has the combined firm built the integrated culture, service capability, and market presence that justified the transaction thesis? These questions need owners and milestones before the LOI is signed, not after the integration has already begun.

What This Requires of Leadership

The discipline of building a value-creation plan before signing requires treating the work of capturing value as rigorously as the work of negotiating price. These two activities are parallel, not sequential, and the firms that treat them as sequential, negotiating hard on price while deferring the question of how value actually gets created, are the firms that produce the outcomes the research documents.

In practice, this means the leadership team entering a deal should be able to answer a short set of questions with specificity before the LOI goes out. What are the three to five concrete initiatives through which this combination will create value beyond what either firm could do independently? Who owns each initiative, and what does success look like at 12 months? What is the base business protection plan for the 90-day window between announcement and integration stability? What retention commitments are required to keep the people on whom the deal thesis depends? Where are the assumptions in the deal model that are most likely to underperform, and what is the contingency?

The firms that can answer those questions before signing are in a fundamentally different position than those that plan to figure it out in the months after close.

Final Word

The accounting profession's M&A market is active, well-capitalized, and increasingly competitive. Firms acquiring at volume are building the integration muscle to do it well consistently. Firms acquiring opportunistically, without a structured value-creation plan, are competing in that market with a significant disadvantage.

Hollinden works with accounting and advisory firms to build the strategic clarity, integration readiness, and value-creation discipline that makes a transaction worth completing. If you're evaluating an acquisition or preparing to pursue one, that conversation is worth having before you sign. Let's talk.