M&A Uptick Takes a Hold on Tax and Accounting Industry
M&A activity within the accounting industry is increasing with a focus on top accounting and tax firms. TowerBrook Capital Partners recently announced its strategic investment in EisnerAmper, a top 20 accounting firm based in New York. Another deal in this space involves CliftonLarsonAllen, the eighth largest accounting firm in the country who acquired Blum, Shapiro & Co., the largest firm in New England. As the companies at the top continue to solidify their market share, they plan to focus on M&A activity to help them not only grow their revenues but remain competitively positioned to retain talent.1
Intuit Makes Big Move to Benefit Small Businesses
Intuit, the creator of TurboTax, agreed to buy the email-marketing company MailChimp for about $12B, a move aimed to capitalize on the growth of small and midsize businesses. As businesses begin to recover from the setbacks of the Pandemic, this move will pair Intuit’s bookkeeping software, QuickBooks, with MailChimp to enable businesses to do “everything from setting up online stores and displaying ads to potential customers to invoicing clients and managing payroll.” The deal will be financed with cash on hand and about $4.5B to $5B in new debt. Nearly 80% of small to midsize businesses lack a formal CRM system, and by bridging this gap, Intuit looks to disrupt the small business landscape.2
The Agriculture Industry Pushes Toward Smart Farming
The agriculture industry seeks smart farming to mitigate the effects of climate change, coupled with continuously increasing populations. Smart Farming is particularly useful for farmers needing to address crop monitoring deficiencies. For example, IoT technology aids farmers in tracking water use and nutrient density to optimize harvesting yields. The use of IoT for farming aims to improve product quality, manage costs and resources, and even help generate new business value. There are still concerns with the implementation of smart farming projects that are yet to be solved. For example, challenges such as poor performance and cybersecurity threats exist—farmers can combat these challenges by regularly updating software and staying up to date with best protection practices. While there may be growing pains, smart farming appears to be a step in the right direction.3
Office Furniture Manufacturers Prepare for the Future of Workspaces
Since COVID-19 began in March 2020, the future of the office workplace has remained uncertain. As employees return to the office, there is no certainty that the office will be like it was before the Pandemic. As businesses evaluate how they use their space in the future, office furniture designers and manufacturers are working hard to adapt accordingly. Office furniture designers and manufacturers are betting that their new ideas will have to be agile and adaptable enough to fit all potential scenarios. For example, Steelcase has unveiled Lite Scale, which allows corporate offices to easily create an enclosed glass area. Herman Miller has introduced Prospect Creative Workspaces which add functional additions and acoustic pads to help reduce sound distractions. In addition to new product lines, they have also acquired Knoll, Inc—a commercial and residential furniture manufacturer—to advance their business.4 5
Digitalization Transforms the Professional Services Industry
The professional services sector comprises a wide range of services, from technology and business consulting to legal and recruitment services. Traditionally, many professional services firms bill engagements based on the amount of time and materials spent. However, the Pandemic combined with rapidly growing digitalization has accelerated the speed of business, led to more digital service delivery, and shifted customer demands. As a result, some businesses in the professional services industry have adapted to an outcome-based business model. Firms like Accenture have been pioneering this strategy with engagements linked to performance and business outcomes. Similarly, consulting firm BCG Digital Ventures partners with customers to launch new business ventures together, proving that having skin in the game can be a successful business model.6 7
Largest Transactions Closed
- Knoll, Inc.
- Herman Miller, Inc.
- Real Capital Analytics, Inc.
- MSCI Inc.
- Liberty Tax Business Segment of Franchise Group, Inc.
- NextPoint Financial, Inc.
- Halfaker And Associates, LLC
- Science Applications International Corporation
- PandoLogic, Inc.
- Veritone, Inc.
- Remedial Construction Services, L.P.
- Keller Group plc
Other Financial Buyer Transactions Closed
- EmployBridge Holding Company
- Apollo Global Management, Inc.
- PRO Unlimited Inc.
- EQT Partners AB
- Resource Label Group, LLC
- Ares Management Corporation
Other Strategic Buyer Transactions Closed
- International Business Government Counsellors, Inc.
- Red Flag Consulting Limited
- RSC Advisory Group, LLC
- Bolton Partners
- Brinks Gilson & Lione
- Crowell & Moring LLP
- Jendro Sanitation Services Inc.
- LJP Waste Solutions, LLC
- Execution Compliance and Surveillance Service assets of Jordan & Jordan Inc.
- Broadridge Financial Solutions, Inc.
This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.
EBIT - Earnings Before Interest and Taxes