Andrew Gragnani, the brand new president of Mayer Hoffman McCann, has plans to extend the agency’s nationwide presence, together with buying different accounting companies.
MHM, a High 10 Agency in Cleveland that operates in an alternate follow construction with the publicly traded monetary companies firm CBIZ, introduced Gragnani’s appointment earlier this month, succeeding Andy Burczyk, who’s retiring (see story). Gragnani has been a shareholder at MHM for 13 years, serving on the agency’s govt committee and as a regional attest follow chief for the previous 12 years. One in all his first orders of enterprise will probably be to take care of the latest acquisition by CBIZ and MHM of Marks Paneth LLP, a High 50 Agency in New York, in January. The agency made two different acquisitions final 12 months as properly. Final September, CBIZ MHM acquired Shea Labagh Dobberstein, a agency in San Francisco, and final April it acquired Berntson Porter & Firm PLLC, a agency in Bellevue, Washington.
Gragnani expects extra M&A sooner or later, in addition to rising different areas organically, whereas additionally increasing MHM’s efforts at range and inclusion, and environmental, social and governance reporting.
Mayer Hoffman McCann president Andrew Gragnani
“Now we have continued to deal with our folks, our tradition, efforts round D&I, ESG and innovation,” Gragnani not too long ago informed Accounting As we speak. “Our management staff is engaged and closely concerned with all of this strategic work. Clearly CBIZ is vital. There’s a whole lot of alternative on the market for our folks internally in addition to in our workplaces. We’re seeking to construct out our nationwide workplace to assist this progress. Given sure of the transactions which have occurred over the previous couple of years, particularly within the various follow construction house that we’re in with CBIZ, it’s created a whole lot of alternatives for us to actually purchase companies that make sense from a geographic and area of interest business match. You’ll see us proceed to try this along with CBIZ. It’s a reasonably thrilling time to take over, given the chance to steer the agency into the following technology, if you’ll, in what I believe goes to be a progress interval for the agency as we actually deal with all these issues, however actually an acquisition focus simply predicated upon what’s occurring within the market.”
The offers with Shea Labagh Dobberstein and Berntson Porter helped MHM develop its presence in some new markets, whereas the Marks Paneth helped the agency increase in an present market. “When you have a look at these two transactions, these gave us some footholds in areas the place we beforehand didn’t have a presence,” stated Gragnani. “As we begin to take a look at the place we’re, the placement and area of interest, may we safe better presence in an space the place we presently have a follow that has carried out properly? That was a part of the entire Marks Paneth transaction that we not too long ago had.”
Gragnani joined the agency when CBIZ and MHM acquired Mahoney Cohen, a New York-based agency, in 2009. “I used to be a part of the Mahoney Cohen transaction,” he stated. “After I left Andersen, I went to Mahoney Cohen and we have been acquired again in 2009. That workplace has been by its subsequent technology. Working together with CBIZ, we’re fairly lucky to be with a strategic associate like that who offers us a really stable base to be positioned to execute these transactions. The partnership that we have now with them permits us to be able to making the most of what we expect goes to be a powerful M&A market.”
With the choice follow construction, MHM acquires the audit and attest facet of a CPA agency, and sometimes the tax facet as properly, whereas CBIZ acquires the consulting facet.
“Within the construction, from an attest standpoint, we’re very targeted on our proprietary methodologies, our expertise deployment in addition to a whole lot of our coverage surrounding audit high quality, particularly on consumer acceptance and session,” stated Gragnani. “Having a partnership with CBIZ permits us to deal with high quality efforts.”
He has been working with Burczyk in the course of the transition, in addition to with Jeff Gluck, who was named chairman of the MHM board. “It’s been an fascinating couple of weeks,” stated Gragnani. “I’ve labored with Andy for a very long time. We have been engaged on a whole lot of issues, so it’s a easy transition. I’ve been lucky sufficient to work with Jeff for a really very long time. He and I have been a part of the agency that obtained acquired, so I’ve identified Jeff for a really very long time. It’s his position operating the New York workplace and in my position at MHM, I needed to work hand in hand within the operations of the New York workplace from an attest standpoint, whereas he was operating the workplace. I’m very comfy with our relationship. Our communication could be very collaborative, very clear, and we’re in alignment with CBIZ on strategic targets and the place we have to place our agency within the market.”
CBIZ and MHM keep a level of independence by sustaining two separate boards of administrators. Additionally they have an independence officer who has protocols and insurance policies arrange for when the attest and nonattest sides work on frequent purchasers. “That’s paramount in being a part of the follow construction and making certain that happens,” stated Gragnani. “We’re very comfy and moral in how we not solely function, however execute.”
CBIZ is primarily taking cost of ESG and DE&I consulting, however MHM has illustration on the committees because the voice of the attest follow.
The audit market could also be increasing for companies with a latest proposal by the Securities and Alternate Fee this month to require hedge funds and personal fairness companies to bear audits of their monetary statements on at the least an annual foundation and upon liquidation (see story). Underneath the SEC proposal, audited monetary statements would have to be distributed to traders promptly after the completion of the audit. “These audits would offer an essential test on the adviser’s valuation of personal fund property, which regularly function the premise for the calculation of the adviser’s charges, and shield personal fund traders towards misappropriation of fund property,” stated the SEC in a truth sheet. The proposal, which additionally consists of better disclosure of charges, is more likely to entice appreciable pushback from the personal fairness and hedge fund business, but when it does undergo, it may present extra enterprise for audit companies. CBIZ and MHM have a lot of purchasers already in that sector.
“We’re fairly lucky that we have now made a whole lot of inroads in working with a lot of teams, primarily within the Northeast, however all through the nation we’ve actually seen a whole lot of progress,” stated Gragnani. “I believe it might present extra alternative throughout the nation for us. I believe we’ve obtained a reasonably good observe document of working with a few key gamers in a few key markets, and it’s actually fueled a whole lot of progress for us.”
MHM and CBIZ plan to compete extra with different companies because the conflict for expertise continues to rage within the accounting career. “With the continuous battle for folks and expertise and the Nice Resignation and all that, we’re attempting to embrace the distant surroundings, and offering versatile work preparations for folks,” stated Gragnani. “Among the companies have actually put some stakes within the floor which might be innovative, and you could be attentive to that and acknowledge the way to handle that successfully from a threat administration high quality standpoint. We’re taking a look at a lot of various things because it pertains to these areas, however we’re targeted on our folks, what retains them up at night time, what makes them tick, what’s essential. How will we not solely make their work fulfilling, however they really feel like they’re being challenged they usually’ve obtained a capability to progress inside a company? They need to be capable of do this in an surroundings that’s versatile and distant. From a expertise standpoint, we’re attempting to get our methodology to the place folks can entry it on their telephones. The expertise is vital to try this. We’ve obtained a very good staff to reap the benefits of all these issues plus the rising expertise that everyone’s taking a look at.”
In some areas of the nation, CBIZ and MHM staff have been returning to their workplaces, though in New York and many of the Northeast, many staff are nonetheless working remotely.
“In different elements of the nation in our workplaces, it’s again to regular, and I’m very optimistic that we’re going to have a return to normalcy and get folks again,” stated Gragnani. “However to the extent we don’t, we’ll handle that. We held a lot of dwell coaching [sessions] in 2021, and we had excellent attendance, and we’re planning for continued dwell coaching. We’re planning on extra folks coming in, however we’ll nonetheless present these distant choices which might be wanted. That’s a part of attempting to supply these avenues for folks, giving them flexibility. We pulled it off in 2021. We’re going to tug it off once more in 2022 and do it higher.”