In 1973, when Michael Nall was a fresh, young recruit for the Chicago office of Arthur Andersen, the furthest thing from his mind was a scenario 25 years into the future in which he owns his own company that specializes in mergers and acquisitions. Still — even back then — he had an inkling he was in for some kind of major change when he began to think that there must be a way to take his knowledge of accounting and make it blossom into a larger venue.

“I knew I didn’t want to do traditional accounting, even though it came easy to me,” he says. “Even back then, I remained alert to new opportunities to grow and change with the profession. What’s so exciting about what I do now is that there is risk as well as challenge; there are several million private businesses who need these type of services and hardly any CPAs who provide investment banking services.”

From Sales to Mergers
This 47-year-old resident of Irvine, CA and owner of Global Capital Network, thinks of himself as a staunch advocate for the CPA profession-and with good reason. His alliances within the profession strengthen his own circle while providing a means to an end. He derives his main source of revenue not only from incorporating accounting and tax principles when he structures transactions for clients, but also from providing continuing professional education in teaching others how to do exactly what he does.

“In the mergers business, CPAs have opportunities to be involved as much as they choose to be,” says Michael. “With the right referral relationships and knowledge of how the process works, you can joint venture with someone who will bear the ‘risk’ in return for a smaller portion of the fee. Today, there is a growing community of specialists involved in these services, and you can share the workload and perform the functions with which you are the most comfortable.”

What Michael found most comfortable in the mid-70s was transitioning himself from the large firm environment to a sales position, not because he wanted to leave the profession, but because he wanted to try his hand at something that held a tinge of uncertainty or risk. He worked as a sales rep for Scott Paper in Chicago for two years, then joined his sales and accounting knowledge by becoming national sales manager for Comprehensive Accounting, a franchise organization that helped accountants set up their own bookkeeping and tax practice.

He enjoyed working in this arena so much that he moved to Southern California and opened his own office for Comprehensive. Mike achieved a goal to find a client who wanted to sell their business when he stumbled upon Geneva Corporation, the largest middle market business broker at that time. This episode sparked an interest in learning how deals came together for private clients, and in turn, he sold his practice and became managing director for Geneva.

“CPAs hold an ideal position to advise business clients because they have the ability to get very comfortable with both the financial and tax ramifications on any given transaction — a big advantage over others who don’t have a financial background with this kind of experience. Most CPAs, on the other hand, lack the buyer contacts and transaction knowledge to see the deal completed.”

Referrals and Alliances
Michael parlayed this lack of knowledge in mergers and acquisitions to an even greater level when he prepared a two-day training program in 1995 built around the needs of the private business owner. In addition to delivering the course to private investor groups and attorneys specializing in estate planning, he also teaches it in conjunction with AICPA meetings and through the National Association of Certified Valuation Analysts.

“Participants walk away with a keen awareness of new professional capabilities in the corporate finance and investment banking area. Transaction know-how and referral contacts help the CPA to play a larger role in helping business owner clients with these deals,” says Michael.

Moreover, he is beginning to see the rewards of keeping interested participants in the loop when he structures new deals by forming alliances with CPAs across the United States. In fact, he completed selling a $20 million computer leasing and outsourcing business as a result from a CPA in San Francisco who attended a training workshop. The sale resulted in a $500,000 success fee, with half going to Global Capital and half to the CPA firm who worked with him in completing the deal.

Typically, Michael works on a contingent fee basis in structuring transactions and identifying investors that satisfy the client, but puts forth some risk by splitting the initial marketing costs with the client.When the transaction is completed, these costs are credited against the success fee.

“We complete about half the deals we work on, and that’s a very high batting average based on 15 years of experience because we’re very selective on the projects we’ll take on,” he says. “CPAs who don’t have a great deal of experience have the natural inclination to take on any kind of project, but if you drill too many dry holes, you’re out of business.”