Hartford Business Journal

HARTFORDBUSINESS.COM | FEBRUARY 5, 2024 25 FOCUS: ACCOUNTING Access Health CT Adams & Knight ADNET Technologies, LLC Bradley, Foster & Sargent, Inc. Burns & McDonnell Charles IT Child Health & Development Institute of CT, Inc. Comcast -- Western New England Region. Connecticut Carpentry Corporation Connecticut Ear, Nose & Throat Associates, P.C. Connecticut Trial Firm, LLC Connecticut Wealth Management, LLC Consigli Construction Co., Inc Cooperative Systems, LLC Diray Media Downes Construction Company Edward Jones Flow Tech, Inc. GO Agency Habitat for Humanity North Central Connecticut Hinckley Allen HNTB Inspira Marketing Group Interscape Commercial Environments Johnson Brunetti MicroCare LLC Mintz + Hoke NBT Bank Olsen Construction Services OneDigital Reid & Riege, P.C. Robinson & Cole LLP Saisystems International, Inc. Scient Federal Credit Union SIMPSON Healthcare The Associated Construction Company The Walker Group UHY USAAAW Waste and Recycling Vaco LLC Wonka Edition The WInners! Let''s celebrate the winners! COME CELEBRATE WITH US! SCAN HERE MARCH 7, 2024 5:00 - 8:00 pm | Aqua Turf Club EVENT PARTNER: SUPPORTING SPONSOR: PRESENTING SPONSORS: discuss a possible merger. He said he looks at every deal that comes across his desk, but it has to make sense. A deal would not be worth the time or investment if all it brings to the table is a few clients with tax returns and financial statement preparation, he said. "Usually, we look at the clients and the mix of clients, what they have for internal staff," he said. "A lot of times the profitability of those smaller firms might not be there." For services like tax returns and financial statement preparation, a larger firm might have to charge a client two, three or even five times more "to make it worth it," Andrews said. But when a smaller firm merges with a larger one, clients also get a larger pool of resources that may not have previously been available, Sabol said. Giamalis and Co. brings with it to MahoneySabol, clients primarily in the restaurant, real estate, auto- motive dealership and construction industries, Sabol said. "The world's gotten more compli- cated, and many clients now need services that maybe a smaller firm doesn't have in-house," Sabol said, such as estate planning or cybersecurity consulting. Larger firms also typically have more staff and advanced technology, like artificial intelligence. More accounting firms are embracing AI as a helpful tool to tackle some of the more repetitive and rule-based tasks, or invoice processing and account reconciliations, experts said. Federman, Lally & Remis, in announcing the Marcum deal, said its clients will benefit by gaining "a richer array of services," including enhanced assurance, tax and advi- sory services in areas such as R&D tax credits, international tax, transac- tion advisory and cybersecurity. The acquisition was struck about a year after Federman, Lally & Remis' managing partner, David S. Federman, died at the age of 79. Sealing the deal Absorbing a firm is no small under- taking, Andrews said. Details of most mergers are not disclosed, but deals often come with retention clauses, particularly for retiring partners, and the whole transition takes about three years to complete, Andrews said. Accounting is a very relation- ship-driven business, he said, so it's imperative that a partner stay on during the transition, especially for client retention. Most smaller-scale mergers and acquisitions, like several in Connecticut, involve a payout over time, usually a percentage of a firm's gross revenue. Mergers allow acquiring firms to continue their growth by offering more services with a larger staff, Sabol said. Kirsten Piechota, marketing and communications director for the Connecticut Society of CPAs, said mergers and acquisitions are not new, but they have been on a steady uptick over the past 10 years. Deals are coming together more frequently now after a short hiatus during the COVID-19 pandemic, she said. The society doesn't keep statistics on mergers, but Piechota said January is tradi- tionally a busy month for deals, as buyers and sellers want a fresh start at the beginning of the year. As firms get larger after mergers, they are able to invest more in technology and AI, which changed "almost every aspect of the profes- sion," she said. Drew Andrews is the CEO of Hartford-based accounting and consulting firm Whittlesey. PHOTO | CONTRIBUTED Kirsten Piechota

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