The market for mergers and acquisitions in the accounting pro­fession has changed dramatically over the past 18 months. Be­fore the financial crisis in 2008, M&As were viewed more as a tool for acquiring experienced taleni and less as a means for grow­ing the top line. The economic shift has contributed to a more vig­orous outlook for M&As in the near future. Three factors appear to be at the core of the trend:

• The demographics of the profession are causing a
  significant increase in the need for external succession in a large number of firms.
• Economic turmoil has created a renewed interest in M&As for firms to sustain growth
• The globalization of  the U.S. economy continues to require that firms provide clients more breadth and depth of services and delivery points.

Prior to 2008, the market for M&As in the accounting profession was moving in a dis­tinct direction. Growth-oriented firms (those firms making up the buy side of the equation) were expanding organically at a significant rate. Staff was hard to find. As a result, many firms were becoming more selective in the business transactions they would consider. Many firms viewed M&As as a method for acquiring partner and staff talent and for achieving strategic objectives such as entering new markets and service offerings rather than as a means of ac­quiring clients. A solid client base no longer seemed to be enough to attract a lot of buyers to a firm that had a need for an external succession solution.

Abruptly in the fall of 2008, organic growth stopped. Since many growth-ori­ented firms require ongoing expansion as a key part of their culture, they started looking at M&As again as a way to grow the top line. This has led to more flexible criteria for M&A candidates in many cases and a significant increase in M&A activi­ty in many markets.

For the full article, please click here

If you are considering M&A transactions, please contact Peggy.