Seller PTO as a synergy

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February 05, 2024

by a searcher from University of California, Berkeley - Haas School of Business in Seattle, WA, USA

Hi,

I am identifying and evaluating synergies and dis-synergies for our post-close dealbook. The deal was a strategic acquisition, so the previous owners will not be replaced. The previous owners' salaries, bonuses, and other compensation can all be cost-saving synergies. However, how do you handle their PTO? It is an accrued liability on the balance sheet, and I'm wondering if it can be counted as a synergy.

Thanks for the help!

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Reply by a searcher
from North Park University in Orlando, FL, USA
A few factors can impact this, asset v stock sale, what state they are in, etc. Here's a helpful resource https://www.foley.com/insights/publications/2021/04/form-employee-benefits-executive-compensation/
As a PEO (my former company) we supported our clients that went through acquisitions and I saw a few different treatments here, but generally we saw asset sales where the seller was liable and paid out accrued PTO at the date of the transaction. Good luck with your deal!
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