Forvis and Mazars are creating a two-member global network called Forvis Mazars that they predict will become a Top 10 international network when it’s finalized next June.
It will include only those two firms, with Forvis operating it in the U.S. and Mazars abroad. Mazars plans to preserve its integrated partnership model in more than 100 countries and territories, while Forvis will maintain its partnership structure in the U.S., but they will operate under a single global brand.
Forvis became a Top 10 U.S. firm after the 2022 megamerger of Dixon Hughes Goodman with BKD CPAs & Advisors (see story). It ranked No. 9 on Accounting Today‘s 2023 list of the Top 100 Firms, and in August it reported annual revenue of nearly $1.7 billion for the fiscal year ending May 31, 2023, and a total of over 6,000 people.
The Mazars Group network earns $3 billion in revenue and has 34,000 people in 100 countries and over 300 offices. In February it reported growth of 16.4% in fiscal year 2021-2022 in its international network of audit, tax and advisory firms, reaching €2.45 billion ($2.6 billion) in total fee income. Its U.S. firm, Mazars USA, based in New York, emerged from the 2010 merger of Weiser, a New York-based Top 100 Firm, with the Paris-based Mazars network. For seven years, the U.S. firm called itself WeiserMazars before it was renamed Mazars USA in 2017.
The firms will now go through another rebranding when the deal takes effect on June 1, 2024 and become known as Forvis Mazars. Even though they will be forming their own two-firm global network, both Forvis and Mazars plan to remain part of the Praxity alliance of independent firms. And while the combination is not considered to be a merger, Mazars USA will be acquired by Forvis when it joins the network on June 1. Mazars USA ranked No. 30 on Accounting Today’s 2023 list of the Top 100 Firms, with $305 million in annual revenue, over 100 partners and more than 1,000 staff.
“What we’re talking about is the formation of a new top 10 global network, where we’ll go to market under the same global brand in our sector,” said Forvis CEO Tom Watson. “It’s not a merger of Forvis and Mazars, but it is our two organizations coming together to form what we think is a really unique two-firm network that will be effective June 1 of 2024.”
Mazars has wanted to expand the network’s presence in the U.S., and the deal with Forvis will give it access to that firm’s wider presence. Mazars USA has 14 offices and operates in nine states. Forvis operates in 27 U.S. states and has 68 offices, including some abroad in London, the Cayman Islands and Toronto.
“It will be one single global brand that will be carried everywhere, the U.S. and the rest of the world, and that is Forvis Mazars,” said Mazars USA chairman and CEO Victor Wahba.
Watson sees the deal as a way to expand Forvis’s presence internationally as part of a global brand.
“We’ve worked together in Praxity for many years,” he said. “We plan to remain in Praxity, and we are committed to that alliance. But we also started talking about the idea of both of us having very unique needs, including where we see our clients, that indicated that forming a two-firm network between our two organizations would be the right move for us for a number of reasons. During every part of this, we were evaluating the overall landscape that our profession is in right now. You’ve seen stories about private equity and ESOPs and alternative ownership models, but as we were looking at the strategies that we wanted to achieve, plus the value that we placed in our unique DNA, and just our overall culture, we really felt like it was important for us to maintain our partnership model. We really are committed to that. We think it brings great value to us. Forming this two-firm network enabled us to achieve a very big strategic step while maintaining our existing organizational and ownership structure, which we value a lot.”
As part of the agreement, there will be one group per country.
“Because Forvis was in the U.S., and Victor’s firm Mazars was in the U.S., we agreed that upon the effective date of the network, Mazars USA would enter an acquisition agreement with Forvis, and their partners and team members would join Forvis, effective June 1, 2024,” said Watson. “The primary reason for that is that it was part of our goal of creating this unique two-firm network on a global basis.”
He noted that Mazars operates under an integrated partnership model. “It’s very unique, where all of the countries are part of an integrated partnership,” said Watson. “Forvis, the legacy board of this partnership, will oversee the United States part of our network.”
He said the deal is more like a combination than a merger. “The BKD and DHG transaction was legally a merger,” said Watson. “The structure between Forvis and Mazars is structured differently. I think a combination is a good way to describe it because of the legal structure, but long story short, effective June 1 of 2024, we will be working together under a single partnership as we come together.”
“I am really delighted that Mazars and Forvis have taken this transformational step and am excited about the opportunities it presents for both firms in serving our clients and supporting our people” said Mazars Group CEO and chairman Hervé Hélias in a statement Wednesday. “We’re proud to bring a pioneering new network model to our industry and are excited to continue this journey together.”
The network will operate in a different way from most international accounting firm networks. “What is very unique about the network that’s being created is it’s a network made up of two organizations, which provides agility and nimbleness,” said Wahba. “Most of the networks are made up of hundreds of firms, mostly driven by each country having its own partnership or its own firm. By having just two firms, we’re going to be able to move much quicker. The objectives and ambitions we have are common, and the needs that we have are complementary.”
Both firms have been going through a number of rebranding moves in recent years, and now they will need to build awareness of the latest name change.
“We’ve got a lot of really smart people that will be working with us to make sure that occurs,” said Watson. “It means having plans and procedures in place that build a lot of brand awareness. We think it will be an easy pivot to start building the brand around Forvis Mazars. One thing that has always been clear to me is who you are is far more important than what you’re called. Our brand is developed based on how we take care of our clients and how we take care of our people. When I look at the amazing cultures of both Mazars and Forvis, we’ve got a great starting point for building a great brand because we’ve got two great firms that are doing it. That makes it even more powerful when we bring those two names together.”
They will aim to leverage their existing brand-name awareness.
“Both brands are so well known,” said Wahba. “That was one of the aspects of our unique network of having both brand names. This really does provide a fresh, new solution to the market by providing full-scale, international coverage, and seamless coast-to-coast U.S. national coverage. That’s how we intend to promote the names. When we joined Mazars, we were originally WeiserMazars, and we carried the Mazars brand, and we’ve been working on extending the brand recognition in the U.S. Forvis has tremendous recognition now in the U.S., so bringing the two names together is going to be the path. And just to be clear, it’s going to stay that way for quite a long time indefinitely, and that’s how we would be promoting it here in the U.S. as well as in the rest of the world.”
The firms are likely to do more mergers and acquisitions of their own in the future, but they plan to remain a two-firm network.
“From the network perspective, at this point, we don’t have any plans to add new members, so we’ll continue as a two-firm network going forward,” said Watson. “That doesn’t mean that both of us as independent members will not continue to look for high-quality, high-potential M&A partners. All of us have discussions going on all the time, and you have to be very wise in the way that you proceed on those, but we will continue to move forward with the right M&A transactions as we identify folks who would like to join.”
So far, the announcement is being received well at both firms.
“We just did some announcements now in our firms, and what we’ve come away with is it’s a great fit, and it’s the right time to form Forvis Mazars,” said Wahba. “We do have common strategies and ambitions and complementary needs. This network will accelerate our objectives by at least a decade’s worth of time.”
As firms look for ways to grow and attract new talent, it could be a selling point as well. “It’s a talent magnet,” said Wahba.
“When we created Forvis, we found that we made it even more attractive to our recruits, whether they were campus hires or experienced hires,” said Watson. “As folks look at the culture that we’ve built and now the fact that we have a global brand and network that they can be a part of, it will be a catalyst for opportunities to join us. We’re very excited that it will help us hopefully win more clients and also attract many more super-high-quality people.”
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