Eddie Nusbaum & Co. put up a good number, $4.2 billion to be precise. That's […]
“The largest companies are generally served by one of the Big Four firms and I think that’s going to continue to be true and one of the reasons are the needs of that market place, due to the scale of those enterprises.”
~ Deloitte Global CEO Jim Quigley (who must have been making the rounds today) doesn’t see a return to the Big 5.
At the time, it sounded like the deal was all but guaranteed, just a small matter of the partners voting on the merger and shazam! Global 6 Contender!
Accountancy Age reports that “vast majority of partners on both sides agreed to the officially resides in the good old US of A as “WeiserMazars.” The article states that no layoffs will occur as a result of the merger. AA also reports that the new executive board will be meeting next month to discuss “driving growth from the newly combined business.” Whether this includes more mergers in the Western Hemisphere, we can only speculate.
The combined firm has 12,500 employees including 680 partners. According to Mazars’ most recent annual report, the firm had over €773 mil in revenues (just over a $1 bil) while Weiser had just over $135 million in revenues.
WeiserMazars spokeswoman Laura Kucera provided us with the firm’s press release:
Weiser LLP Joins Mazars Group Worldwide to Offer Clients International Services Opportunities
Mazars, an international group specialising in audit and advisory services and Weiser, an audit and advisory firm with a strong presence in the north east region of the U.S., have announced today that their businesses are to combine.
Partners from both entities have voted to incorporate 74 Weiser partners into Mazars’ international integrated partnership. Reflecting this new arrangement, Weiser will become a Mazars member firm and be renamed WeiserMazars LLP.
The deal marks a new stage in the Mazars’ international development, and means that it will have member firm offices in 56 countries, served by 12,500 professionals, including over 680 partners.
Mazars and Weiser, which employs more than 650 professionals and has annual revenues of $ 135m, have maintained a close and fruitful relationship for the last ten years via a joint venture agreement.
Patrick de Cambourg, Chairman and CEO of Mazars says: “We have worked with Weiser for ten years via a joint venture agreement. This combination is the result of our excellent relationship, our shared values and commitment to offering high quality services to our clients. This enhanced relationship is a natural development based on our mutual trust. We are delighted to welcome Weiser into our partnership. They are a first-rate firm with an excellent reputation in the New York area market. It is an important step in Mazars’ development and our clients will benefit from the formal combining of our services in the U.S. market.”
Douglas A. Phillips, Chairman of Weiser, added: “Serving our clients means helping them on a global level, beyond borders. This is why we made the choice to develop an international joint venture with Mazars in 2000. Today, we are happy to develop our relationship with Mazars by fully joining the Mazars international integrated partnership as we know that when like-minded professionals work together, they obtain excellent results.”
A video interview with Patrick de Cambourg and Douglas Phillips, is available. Please contact us if you wish to receive a copy.
Since it’s inception, Weiser has provided quality accounting, audit, tax and consulting services to clients in industries spanning, manufacturing and distribution, real estate, financial services, healthcare, nonprofit, media/entertainment and automotive, as well as to high net worth individuals and their families. The firm is headquartered in New York City.
Accounting Today put out their annual Top 100 Firms list late last week and while it focuses on the practices in United States it give us a little bit of room to speculate about who the real contenders are for the Global Six whathaveyou.
The ranking is based on net revenues from U.S. operations but it includes a lot data on each firm including # of offices, partners, total employees, and fee split.
Deloitte runs away with this list in three of the major categories – revenues, number of partners and total employees. The Casa de Salzberg had U.S. revenue of over $10.7 billion which was greater than #2 E&Y by over $3 billion.
Here are the top 10 firms along with their revenues, number of offices, number of partners and total employees
1. Deloitte – $10.7 billion; 102; 2,968; 42,367
2. Ernst & Young – $7.6 billion; 80; 2,500; 25,600
3. PricewaterhouseCoopers – $7.4 billion; 76; 2,235; 31,681
4. KPMG – $5 billion; 88; 1,847; 22,960
5. RSM McGladrey/McGladrey & Pullen – $1.5 billion; 93; 751; 7,755
6. Grant Thornton – $1.1 billion; 37; 535; 5,414
7. BDO – $620 million; 37; 273; 2,712
8. CBIZ/Mayer Hoffman McCann – $601 million; 180; 465; 4,580
9. Crowe Horwath – $508 million; 25; 240; 2,428
10. BKD – $393 million; 31; 258; 1,891
Some other interesting information from the list includes:
• Declining Revenues – Revenues for all firms dropped with the exception of CBIZ/Mayer Hoffman McCann, Crowe Horwath and BKD. KPMG had the largest drop of nearly 11%.
• Big 4 Dominate – The non-Big 4 firms’ combined revenue (approx. $4.7 billion) is still less than KPMG (smallest of the Big 4).
• Personnel Changes – E&Y had a percentage increase in partners of 8.7% while total employees dropped nearly 6%. CBIZ/MHM saw a 32% increase in partners while total employees decreased over 12%. Only PwC and Crowe Horwath saw net increases in the number of partners and total employees.
• Audit Heavy Firms – According to the list, PwC (52%), BDO (60%), Crowe Horwath (65%), and BKD (52%) all receive at least 50% of their revenues from audit fees.
So the whole Global Six thing, as much as we like to making a BFD out of it, is a non-issue. All the firms have global connections whether it’s through their own cooperative or through an international network so to cut it off at six seems a little clique-y. We’ll flip through the AT100 for any more interesting factoids but in the meantime feel to embellish any of the information presented here.
Top 100 Firms 2010 digital edition [Free registration for Digital Edition]
Last week we told you about the on-going Global 6 talks between Mazars and Weiser. As we mentioned then, the copulation of the two firms would put them in the direct competition with the likes of Grant Thornton, BDO, RSM and hell, they may even snag some Big 4 clients.
Web CPA caught up with this story yesterday and we learned that not only has Mazars done business in the states with Weiser, they’ve also “relied on joint venture agreements with U.S. firms…Moss Adams and BKD.”
Maybe we’re going way out on a limb here, but if Mazars is making a play for Weiser (and it sounds like it’s all but a done deal) are they just trying to make a play on the whole IFRS bonanza that’s being unleashed OR are they looking to get closer to the likes of Moss Adams and BKD to expand their exposure and to become a bigger player in the States? Even if Mazars were to merge with Moss Adams and BKD the combined revenues still would be a drop in the bucket of the Big 4 but it would cement their presence in U.S. and allow them to compete even more directly for potential business here.
If we’re letting the cat out of the bag here, mucho apologies, just kinda thinking out loud.
Mid-tier accounting firm Grant Thornton has described the current audit market as unsustainable and is calling for new rules to promote greater competition.
In a letter to the International Organization of Securities Commissions, the firm put together a four point plan aimed at increasing diversity in the concentrated audit industry.
The firm want regulators to require companies to disclose third party agreements that limit auditor choice, discourage companies and financial intermediaries from entering agreements containing restrictive clauses, and publish balanced findings of their inspections of individual audit firms.
The firm claims that in the event of a Big Four collapse, 20% of the 7200 largest businesses in the G20 would be left stranded without an auditor.
Hell, maybe they have a point? If their claims are legit, we are talking over 1,000 companies that just up and don’t have an auditor any more. And the firm can’t instantly quintuple its global revenue.
We asked a frequent commenter on the subject of Big 4 failure, Jim Peterson of Re:Balance, for his thoughts and he told us:
[W]hen the next of the Big Four goes down — which will be in a highly visible and ugly burst of flame and wreckage — the other 3 will quickly enough leave the assurance business themselves. What incentive would they have to stay? They would not have the resources or the political agility to take up the slack, and there would be no upside for them in the face of relentless attacks from the blame-mongers.
So it’s not 20% — it’s 100% — and then the re-building process starts with a blank page.
That sounds kinda serious. Maybe governments do need to get involved. Seems like the going trend these days anyway.
Global audit industry is unsustainable: GT [Accountancy Age]
As you’re aware, we’re obsessed with the notion of the ‘Global 6 Accounting Organization’ moniker. On the one hand it’s a little silly but on the other, many non-Big 4 firms are making a legitimate run to expand their international exposure.
The latest attempt at piercing the Global 6 comes courtesy of a possible merger between the firms Weiser and Mazars. According to Weiser’s website, the two firms currently have an affiliate relationship:
Mazars is an international, integrated, independent organization, ranked fifth largest in Europe. Weiser has established a joint venture with Mazars utilizing its 10,500 professionals in over 50 countries, as needed, to expand the firm’s global reach.
According to the FT, the combined firms will make a push a building their firm around providing IFRS adoption services:
Mazars and Weiser, which have had a joint venture agreement for a decade, decided to merge with the aim of building a new US practice focusing on the adoption of International Financial Reporting Standards by US companies, according to sources.
Weiser partners believe they will have an advantage in the US market working with European partners with extensive experience of IFRS.
We have a little secret to share with the Weiser partners: The Big 4 has European partners will extensive experience in IFRS too. They’re drooling for the IFRS adoption business just like you so hope you’re coming with super-secret plan that will give you a real advantage.
We contacted a Mazars spokesperson who confirmed that the talks were on-going but told us that the contract has yet to be finalized and that both partnerships will have to vote on the proposal. The vote is tentatively set for February or March.
Whether this is the “mega-merger” that was predicted back in August or not we don’t know but the combined firms would have total revenues of $1.3 billion, according to the FT. That’s just a fraction of the Big 4 revenues but it could put them in close competition with the likes of Grant Thornton, RSM International, and BDO.
We’ll continue to keep you updated on the progress of the talks as we learn them.