Accounting firm M&A specialist Allan Koltin predicts a “mega-merger” will take place within the profession before the end of the year.

Speaking at the 2009 Forum on Recruiting and Retention in Chicago earlier this week, Koltin, CEO of Chicago consultancy PDI Global Inc., and a founder of the Advisory Board, shared with the audience some surprising predictions of events he thought would happen between now and the end of the year. “Don’t be surprised to hear about a mega-merger involving two of the top 25 CPA firms in the country who, on day one, would have a revenue base equal to that of the 10th largest CPA firm in the country,” he said.

Koltin noted there have been discussions in recent years of such mergers, and he believes a mega-merger will not only happen this year, but that it would also make sense for both firms. Koltin declined to comment when asked which firms he predicted would merge. However, he did offer his opinions on the recent split between McGladrey & Pullen and H&R Block subsidiary RSM McGladrey (see Block Files Suit Against McGladrey & Pullen).

“There is no question in my mind that the conflict between McGladrey & Pullen and RSM McGladrey/H&R Block will resolve itself in the near future,” he said. “The reality is that both firms are stronger together than separate, and it’s unfortunate that they have to settle their differences now in a public forum.”

When Koltin was asked what he thought would be the next thing that would happen in light of H&R Block’s lawsuit against McGladrey & Pullen, he said, “If I were RSM McGladrey (or H&R Block), I would send an e-mail to all partners and require them to ‘declare their major.’ Simply stated, you’re either ‘in or out’ and my gut is that, if they were to do this, they would find that the majority of partners (who carry both entities’ business cards) will choose to stay with RSM McGladrey. The absolute is that the longer this drags on, all parties get damaged one way or another. It could be the loss of existing clients, potential opportunities, or talented staff who choose to find a new home because they don’t want to be part of the existing conflict.”

Koltin was also asked for his thoughts on the accounting mess and litigation confronting Huron Consulting, one of the leading forensic accounting firms in the country (see SEC Investigates Huron Consulting). “It is very possible that as a result of the SEC investigation, Huron Consulting may no longer exist,” he said. “Everyone is saying that no one else is hiring, so they’re not worried about losing talent. But, make no mistake about it, top talent is always in demand and they will need to assure their ‘best and brightest’ that Huron will not only survive, but will thrive in the future.”


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