the one that got away.
by alan whitman
as ceo of baker tilly from 2015 to 2023, whitman increased the firm’s revenues from $500 million to $1.5 billion, expanded into 15 new u.s. markets and completed more than 20 domestic and international mergers and acquisitions.
“more than a merger. a multiplier.”
that’s how moss adams and baker tilly described their recent merger, and i can’t think of a better way to depict such a game-changing deal.
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after leading 20-plus successful mergers and acquisitions that fueled our growth at baker tilly during my tenure as ceo from 2015-2023, i’ve learned that any merger should be evaluated based on the mindset: bigger isn’t better; better is better.
it’s not about size. it’s about how the two firms elevate the game by combining forces.
unless a merger allows the combined firm to increase its differentiation, organic growth rate, or profitability, why do it?
bigger isn’t better; better is better.
while this merger makes the combined firm significantly larger (~$3b in revenue), i believe there is also a high degree of probability that it will make the combined firm substantially better. the question is, how will their newfound scale be leveraged?
i met moss adams shortly before becoming ceo of baker tilly in 2015. i was struck by their progressive approach in terms of industries, services, and practices. they were ahead of the times and, if i’m being honest, ahead of baker tilly when it came to practice development, industry specialization, and organizational design. what they had built on the west coast was nothing short of impressive.
secretly, i hoped for us to merge with moss adams at that time. in fact, i approached then ceo, chris schmidt, a number of times about exploring a deal. once we realized it wasn’t a possibility, we both went on our way to continue building firms of scale.
today, the time is right. i believe combining moss adams and baker tilly is a game-changer because it immediately creates a scaled firm with a greater chance to advance its market position. while each firm is impressive in its own right, the scale of the combined firm will unlock new opportunities that neither had access to on their own.
like with any merger, we’ll all be watching to see how moss adams and baker tilly come together—as it will ultimately dictate the success of this deal.
specifically, i’ll be watching the following closely:
where will they seek to own the market?
similar to how rsm has carved out a dominant position in the private equity space, it’ll be interesting to watch which market specialization(s) the combined firm decides to target. will it seek to dominate a specific industry, technology, or process automation? since more revenue doesn’t directly equate to a better firm, this will be the true indicator of whether or not the merger creates a multiplier effect.
how will they handle overlapping geographies?
mergers like this create a bit of a noah’s ark situation—with multiple leaders operating in overlapping geographies and practices. how will they manage the overlap in geographies like texas and california, where both firms maintain a strong presence?
how will the ceo transition unfold?
given that my successor, jeff ferro, was set to retire soon, the offer for eric miles to assume ceo must have been a compelling merger point. that doesn’t happen very often, so we can’t underestimate the value of that single move. a new ceo for the platform firm will be an evolving dynamic worth watching over the coming months of transition.
will they continue to focus on the middle market?
being the 6th largest firm in the country puts you in rare air. will the new firm stay true to being a committed solution for the middle market? or will they, like many firms, succumb to the allure of moving upstream to serve larger clients?
while everyone is understandably excited that the combined firm is the 6th largest cpa firm in the us, i’d suggest that it’s the strategic components of this merger that make it a compelling combination. again, better is better.
given the number of strategic deals accomplished at baker tilly during my tenure as ceo, i’m not only a fan of this merger, but i will be watching closely to see how it unfolds.
the big question to be answered: what will they do from here?
will we be talking about the fallout from this deal 24 months from now?
or, will we witness the unprecedented acceleration, growth, and scaling of the new combined firm?
time will tell.