Last week Weiser announced that it was joining Mazars Worldwide as a member firm, a move that would alleviate their relationship to one of a joint venture to that of a full combination. Accordi ess release the combined firm will employ 12,500 people worldwide after adding the 650 Weiser professionals to its international network.
Earlier in the week, we were fortunate enough to arrange a chat with Doug Phillips, Managing Partner of Weiser, LLP to discuss the new firm, the challenges of a cross-Atlantic combination, personnel and client reaction to the combination and the plans for future.
A Solid Business Case Made for a Global Strategy
Doug told us the that joint venture between Weiser and Mazars that begun in February 2000 has been great success for both firms, particularly in the last two years. “The business case for us here at Weiser and for Mazars came to a point where it was quite logical to elevate the joint venture to the next logical step of growth and maturity,” he told us. Doug insisted that this was not a “Resistance is Futile” situation for Weiser, because the firms were in fact combining as opposed to a takeover by Mazars.
According to Doug, the business case for the combination was one of primarily of global strategy. Both firms had experienced significant growth in the last 10 years; their clients’ needs became increasingly global in focus. Doug said, “It gives us a distinct competitive advantage in the marketplace. Existing clients will receive a higher quality of service and we will enjoy the advantage of proposing to new clients.”
Combining Transatlantic Cultures
With regards to the meshing of the firms’ two cultures, Doug said that navigating the tricky waters of an international combination wasn’t as challenging as you might expect, ” We’ve ‘dated’ for 10 years. We know each other’s strengths. We know each other’s weaknesses. The overarching cultural issue is the quality of service. The firms are identical in that regard.”
And to ensure that the Weiser is well represented at the global level, Doug was elected to the group executive board of the firm. This is committee of five that is responsible for running the global organization. “The importance of the combination is recognized by the fact that I took a seat on that board to ensure the effective integration of the cultures of the cross-atlantic combination,” Doug said.
Communication with Employees, Clients was Ongoing
Communication about the combination was ongoing at Weiser. “Things were business as usual and the only real change is that firm’s brand will change to WeiserMazars,” Doug told us. The same approach was taken with Weiser’s clients, “the communication process was ongoing. It’s been universally well received and applauded as a business step without concerns about what will be impacted because [clients] have the assurance that our people remain in place and our dedication to the quality of service remains unchanged.”
With regards to the future, there are no immediate plans for new offices or mergers with other firms but Doug does expect some new non-attest service opportunities for the firm that could result in the hiring of some new experienced professionals not already in-house, “We look forward to increasing the talent pool to provide higher quality sophisticated services to both our current clients and prospective clients.”
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.
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.
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.