{"id":52305,"date":"2017-06-29t05:00:28","date_gmt":"2017-06-29t09:00:28","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=52305"},"modified":"2023-10-05t09:18:38","modified_gmt":"2023-10-05t13:18:38","slug":"ai-likely-accelerate-merger-mania","status":"publish","type":"post","link":"\/\/www.g005e.com\/2017\/06\/29\/ai-likely-accelerate-merger-mania\/","title":{"rendered":"how artificial intelligence will drive the next wave of merger mania"},"content":{"rendered":"
<\/a>it may be time to prepare a plan b.<\/strong><\/p>\n by domenick j. esposito<\/i> we are halfway into the year 2017 and the frenzied pace of cpa firm mergers and acquisitions\u00a0\u2013 when compared to the years 2015 and 2016 when there were over 100 and over 200 transactions, respectively\u00a0\u2013 has not slowed down one bit.<\/p>\n more on strategic planning: <\/b>what a value proposition truly is (and isn\u2019t)<\/a> | the importance of m&a culture due diligence<\/a> | are you attracting the new breed of equity partners?<\/a> | quality work, quality service not the same thing<\/a> | who will be the next category killer?<\/a> | why is strategy execution so difficult?<\/a> | time running out for succession planning<\/a> | the benefits of a client situation review<\/a> we continue to witness a perfect storm caused by: over half of the transactions consummated in the recent past have been closed by the bigger, stronger top 100 firms, who are generally perceived as more profitable. so, the big firms keep getting bigger, stronger and more profitable \u2013 making it even harder for small and midsized cpa firms to remain independent.<\/p>\n it is not unreasonable to mistakenly conclude that \u201cmerger mania\u201d will slow down sooner or later but while it is true that \u201cmerger mania\u201d can\u2019t go on forever, we don\u2019t see any end in sight. anecdotally, we observe that more than one out of every two cpa firms of any significant size is either discussing a merger combination, acquisition or sale or is planning to do so in the near future. and, as if it hasn\u2019t been hard enough for the small and midsized cpa firms to compete, we now see a fast-moving freight train named technology that will more than likely accelerate the merger frenzy.<\/p>\n i believe that multiple mergers and acquisitions, including one or two among the top 20 firms below the giant four, possibly even a merger of equals between top 10 firm #8 through top ten firm #12, are in the cards at least in the near term.<\/p><\/blockquote>\n there isn\u2019t a day that goes by without a technology impact discussion among the leaders in the profession. take, for example, the recent presentation at the 2017 aicpa engage conference when aicpa chair kimberly ellison-taylor and president and ceo barry melancon made the following points:<\/p>\n so, this perfect storm, coupled with the freight train named technology, begs the question:<\/p>\n don\u2019t wait until the last inning of the baseball game when your key partners are nearing retirement. as long as the economy stays anemic and your clients aren\u2019t demanding an awful lot of advisory or consulting services from you, valuations aren\u2019t going to get better in the immediate future.<\/p>\n if you\u2019re not sure your firm can survive and prosper through all these challenges, you should consider pursuing one of the \u201cplan b\u201d alternates:<\/p>\n artificial intelligence is reality for the accounting profession and if your firm is going to deal with it head-on, you are going to make some significant investments in time and dollars. if you are not sure that you will able to make those investments, revert to \u201cplan b.\u201d<\/p>\n a word of caution, however, i implore you \u2013 no matter how tempting it may be, don\u2019t pursue a \u201cplan b\u201d transaction if\u00a0<\/span>1 + 1 doesn\u2019t at least equal 3. if your gut tells you that this will not be the case with a particular transaction, pass on it. it probably isn\u2019t right for your firm. there will be others.<\/p>\n","protected":false},"excerpt":{"rendered":"
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