why the end of busy season spells a new round of dealmaking.
by rick telberg
at large
at one time, you could count on busy season to provide respite from mergers, acquisitions and talent snatches among cpa firms. but not this year.
robert fligel (pictured) at rf resources, the new york-based cpa firm broker and headhunter, reports that, unlike past busy seasons, this busy season is busier than most. “my theory is that it might have something to do with more partners looking at the slowing economy as a time to sell while other forward thinkers are thinking growth by acquisition,” fligel says.
three reasons:
- retirement-minded partners,
- succession issues and
- the slowing economy.
“whatever it is,” fligel says, “we are seeing an extremely active market, unlike past busy seasons, which tend to be the quietest historically.”
so we checked with john ezell, the president of prohorizons brokerage, based in sunnyvale, california, and he confirmed that merger-and-acquisition activity appears to be quickening for smaller firms-albeit with the expected seasonal break.”there is the usual slack-off due to busy season, but activity never completely stops. in fact, i have a buyer and seller doing final due diligence today for a closing march 1,” he was saying late last month. “i do see some acceleration in sales and merger activity for the small firms. with the average age of small firm owners continuing to push up, the merger and acquisition activity should continue to increase as well.”
to be sure, the credit meltdown and a looming recession are clouding the long-term picture.
still, ezell says, “the market is as strong as ever. there seems to be a larger supply of firm owners thinking of selling for many of the same reasons they have done so in the past-retirement, burnout, other business opportunities, etc. we obviously do not know how the tightening of the credit markets will affect these particular transactions in the next few years, but sales and merger activity among small firms appears today to be every bit as active as it has the past few years.”
after checking on the views from new york and california, we went south to atlanta to hear from leon faris (pictured), chief executive of professional accounting sales. “we are seeing a stronger demand from smaller firms to merge with other firms,” faris confirms. “these owners appear to be overworked and overwhelmed due to a lack of adequate staffing to handle the increased workloads.”
overall, faris reports, “the cpa firm merger-acquisition market appears to be holding up well. there continues to be strong demand for the smaller firms, those grossing less than $1 million in annual fees. obviously, things slow down considerably during tax season and begin to recover after the march 15th corporate filing deadline.”
whew! and you thought you’d get a break after busy season? think again.
leave a comment: suggestions, questions, rants or raves? contact rick telberg.
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