Thoughts on ways to improve the management of professional services firms

Friday, July 14, 2006

Consolidation among accounting firms

In my last post (Professional services : mergers, acquisitions and goodwill), I talked in part about mergers and acquistions.

The first round of action by the aggregators in Australia - those acquiring accounting firms to fold them into listed entities - had some spectacular failures. But the trend continues.

I say this because I recently looked at the web site ofthe WKK Group, one of Australia's leading aggregators. See - http://www.whkgroup.com.au/ . Before going on, chaps, when are you going to turn your web site into a real marketing tool?

Being insatiable curious, I dug down into the detail on the site, looking especially at the investor section. Now the beauty of this section is that it includes all the public announcements about acquisitions. So one can look at patterns.

I was especially interested in what WHK calls tuck-in acquistions. These are small firm acquisitions that can be tucked into existing operations. There are a lot of them, with WHK using a mix of shares and cash to acquire the firms. This greater acquisition capacity is one of the reasons why the aggregators are likely to become very major players in accountancy.

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