Speaking to Accountants Daily, Pitcher Partners national chair John Brazzale said the network will not actively look to merge or acquire over the next financial year, and instead look to recruit for in-demand services, including cyber security and transfer pricing.
“Our business model is based on organic growth rather than mergers and acquisitions because with organic growth you're able to better retain the culture that you want to build as a firm,” said Mr Brazzale.
“We're seeing the market move away from compliance type work into advisory type services and it is things like digital strategy, cyber security, and transfer pricing - it's a long-term investment to grow that sort of capability internally and we'll source externally and bring the right people in.”
However, Mr Brazzale acknowledges the threat from the big four, who are pushing into the mid-market space that Pitcher Partners sees as its own.
“Certainly the big four see the mid-market as a lucrative market for them so they continually have strategies to push down into the mid-market and that competition certainly exists,” he added.
He believes the mid-tier network will need to take a progressive view of the market to stay ahead of the competition and has identified the advisory space as well as client M&A deals as areas of opportunity in the year ahead.
“We've invested in significant talent over the last 12 months around the areas of transfer pricing, cyber security, and digital strategy,” said Mr Brazzale.
“The other area we still [see] a lot of activity is the M&A area in the mid-market - that's where we've seen a significant amount of growth and a significant amount of corporate type transactions.
“Business confidence is fairly robust so you'll see that M&A activity climb so they are looking to invest and grow through acquisitions and you'll also see it when capital is a little bit harder to access and so merging to grow rather than funding growth, be it through your own capital or trying to fund it through debt.”