Wipfli’s latest merger is bringing the Midwest-based firm to California, but since the pandemic, it has been able to recruit talent around the world.
Earlier this month, the Milwaukee-based Top 20 Firm announced a deal to merge in Mueller Prost, a St. Louis-based firm that also has offices in Irvine, California (
The deal was another recent sign of the M&A market for accounting firms bouncing back this year as the economy continues its strong recovery, reined in somewhat by an acute shortage of available talent.
“Wipfli and Mueller Prost have been friends for a long time through our Allinial Global relationship, and across the spectrum our leadership team really developed strong relationships in various categories,” said Brian Blaha, growth partner and industry leader at Wipfli. “That was one of the things that solidified the fact that we really have to get together. We looked at the two firms and where we were strong, in health care, manufacturing, distribution, construction, real estate and nonprofits. Those industries just really aligned so well, and from a growth strategy perspective allowed us to deepen each of those core industry focuses for the firm. In those areas the services that we have are very complementary in some aspects and synergistic in others. Mueller Prost had some really strong areas that Wipfli didn’t have built out quite so much, and then likewise the service offerings that we have in our technology area are really going to play well within Mueller Prost’s client base.”
Wipfli will help Mueller Prost’s existing clients with technology consulting and digital transformation. “That’s an area where our clients need more help and also the businesses here in St. Louis can use more assistance with better ERP and CRM systems, and some of the benchmarking in artificial intelligence and business intelligence. They need to have information and make quicker decisions,” said partner Adam Herman. “Half of our business is nationwide, so across the board we’re not only growing St. Louis and Irvine in these particular areas, but nationwide, and these are the areas where clients need more help. We found that Wipfli is very strong in some of the other mergers and acquisitions they’ve made in the past with technology-based firms.”
Wipfli has traditionally done a great many acquisitions, and that could accelerate now that the country seems to be emerging from the pandemic.
“Our merger and acquisition strategy has two strong focuses for us,” said Blaha. “One is talent acquisition. It’s not necessarily geographic-centric. We’re really looking to add strong depths of talent. That’s what we look at when evaluating merger and acquisition targets. The second area is to build out our industry focuses, and then the third area we look to is the maturation of the markets that we enter. Definitely we would look at building out from a market-positioning strategy in St. Louis. Southern California has been a market that we’ve wanted to be in for a long time, so the Mueller Prost merger is really a good entree into that particular market. And then similarly we have some of our other markets that we continue to look for acquisition candidates in order to mature those and increase our overall market share.”
The firm has been able to assist its clients with some of the issues that came out of the pandemic, including small-business relief programs like the Paycheck Protection Program, “Across the board there’s been a lot of help with the PPP loans this past year due to COVID,” said Herman. “Then also there are the employee retention credits that are still very useful for some companies that will qualify for that. We have seen clients grow. CPA firms overall have done well during COVID because of all the additional consulting that was necessary to help clients navigate through this pandemic.”
He has also been seeing more M&A activity. “They’re either looking to acquire other businesses or they’re looking to sell their business, or sell a portion of their business, to hang on,” said Herman. “That area has definitely been hot, so we see a lot of opportunity there. Clients have worked very hard in the industry and with the CPA firms this past year. We’re in the service business, so everyone met the challenge of this past year. Both of our firms got right on it with e-blast information. Anytime the government was coming out with a new program, we immediately got that out to our client base. We even made short films, anything that we could do to get the message out on how we could help them, and overall I think they’ve come out doing pretty well.”
The earlier pre-COVID trend toward remote work has accelerated since the outbreak of the pandemic. “Overnight, we went immediately to working 100% remote, essentially over a weekend,” said Blaha.
The firm has been able to accelerate its technology and digital offerings to serve its clients during the pandemic. “This past year that suite of service offerings outpaced our other service offerings very significantly,” said Blaha. “We still saw strong growth in the compliance areas and in some of the consulting areas, but the move to digital has been obviously key, and we expect that’s going to continue going forward.”
As the pandemic seems to be receding, at least for now, in the U.S., some of Wipfli’s employees have been returning to their offices, even in states like Missouri where vaccination rates have been relatively low.
“Overall people have been returning a little bit more, but I also have found that despite the vaccination rates, some people just get more done in their home office, so they’re maybe doing two or three days in the office or two or three days at home,” said Herman. “Overall I would say people feel safe going to the office. In the St. Louis area, the vaccination rates were maybe a little higher than in Missouri overall because there are a lot of different rural areas, and for whatever reason people haven’t gotten vaccinated or they don’t want to get vaccinated. I would say in the metropolitan area the rate is higher, and business is getting closer to normal, but we’re not there full-time yet.”
The firm has adjusted to a hybrid work environment. “Rather than calling it a return to work, we’ve been calling it the future of work,” said Blaha. “The key point to that is we really want to have strong principles about how our associates will act. There have to be purposeful things in order to draw them back into the office, but we want to be able to give that flexibility and put some of the onus on them in how they’re going to work with us. But also we need to make sure we’re servicing our clients at a high level and working in accordance with how they would like to interact with us as well. For example, I’m in the office four days this week because I have certain collaboration points with teams that I oversee, and maybe next week I might not be in the office at all, or I might be in a different market traveling. We want to have that flexibility built into what we think the future of work is going to be.”
“Technology was put to the ultimate test this past year,” said Herman. “Could you imagine what all of this would look like if we couldn’t talk on Teams and Zoom? It would have been an incredibly difficult task, so we’re very thankful for all of this technology that we’re able to communicate.”
The remote technology has enabled the firm to recruit talent from around the world. “Our global talent strategy plays significantly into how we are going to be able to fuel our growth,” said Blaha. “For example, by the end of this year, we’ll probably be approaching over 500 associates that will be working outside the United States as a key member of our team. Mueller Prost actually had upwards of 50 people working in India as well, so they had a very similar approach to ... talent. That was another key point to the merger was that there was a similar thought process in how we were going to be able to get access to talent that would ultimately fuel our growth strategy.”
As in other firms, Wipfli’s partners and staff have grown accustomed to communicating with each other around the country and other parts of the world through the video technology.
“I can’t even tell you where each person I’m talking with at Wipfli, and what office they’re at,” said Herman. “It doesn’t matter. What matters is the talent and the access to individuals. That’s how this whole landscape has changed: finding the talent no matter where they’re located. They can be located around the world. That’s one of the positive things that have come out of the pandemic, how people are more comfortable with using technology and operating from wherever they are at the time. It keeps productivity up, keeps client service better, and there’s better balance of life too.”
