Interview with Mark Atkinson
Interviewer: Andrew Zezas, SIOR
Following is the transcript of a CFO Studio video between Andrew Zezas, CEO of New Jersey based Real Estate Strategies Corporation and finance executive, Mark Atkinson, President & Co-founder of MEA Advisors.
Visit www.CFOstudio.com to read about this interview and to watch the entire video interview.
Business Valuation Risks and Opportunities
Zezas: Hi, this is Andrew Zezas, your host at CFO Studio. I have the pleasure of sitting here today with Mark Atkinson, President and Co-Founder of MEA Advisors, an evaluation advisory services firm. Mark, thank you very much for being here today.
Atkinson: Andy, thanks for having me here.
Zezas: Mark, there’s a lot of changes going on in the world of finance, valuation, and so on. I thought my first question for you today would pertain to how your role has changed, and how the needs have been changing as it relates to CFOs. What are they looking for in terms of valuation and advisory?
Atkinson: Andy, that’s a great question. A lot has changed in the last few years, I would say in the last ten or more years, in the world of finance and accounting that we work in, people are talking about things like convergence. In a controller’s world, that might mean a lot of convergence between US GAAP and IFRS. But, in my world, as a CPA and valuation specialist, my thoughts on convergence are really between accounting and valuation. Accounting is moved really from a cost based accumulation model to a fair value model. This has really significantly changed the way the skill sets that the CFO has to look for in his organization, as well as the [CFO’s] need to, potentially from time to time for either dependence reasons or for skills that he really doesn’t possess, to reach out to independent resources like our firm.
Zezas: I would think that given the way the world is going and the CFO industry, if I could say it as an industry of CFOs, and how that’s been changing so rapidly, I have to believe that there is a greater call for your services these days. Specifically, because companies that are finding that they are no longer hiring broad based CFOs. Very often, they’re hiring very narrowly focused specialists, and I think those specialists are devoid of the lot of expertise that some of the broader CFOs have had in the past. That’s got to open a door wide for a firm like yours.
Atkinson: Well, I think that’s true Andy. I think that the CFO’s role has become so strategic, that for senior management and board, what they’re looking for is someone who has skills that could really oversee an organization within an organization. And, as they build that team, they have to be very strategic in terms of what they need to put on their platform for employee base. That [employee base coming from] independent or outside resources are probably specialists that stay very current, in very specific areas, like we do.
Zezas: I would think that with the things you’ve mentioned like IFRS, lease accounting, and changes that are on the horizon; I’ve got to believe that with the convergence away from GAAP, that the demand for your services would probably be poised to skyrocket.
Atkinson: Yes, the US has been focused on IFRS adoption, and embracement of IFRS by the US accounting industry and regulators, has been moving very slowly. But, if it does happen, there are many changes within IFRS that bode quite well for what we do.
Zezas: And, what type of projects have you’ve been called into, of late? Are they more global in reach or domestic in reach?
Atkinson: They’re actually more global in reach. There are larger firms than ours. Most of the big four is [who we serve], as well. For what we do, you don’t need to be around the globe to be able to respond what’s going on around the globe. And, I bring that up only because many of the transactions that we’re involved in, M&A transactions that are quite significantly as part of what we do, and those transactions are more and more outside the states where the growth really is certainly for now. And, certainly for the next few years, in consideration of what the U.S. economy is going through right now.
Zezas: And, I would think as the recovery is gaining traction, certainly is evidence of a greater focus on M&A. And, consequently, I can see your services riding that wave.
Atkinson: Well, the M&A is there. Corporations are accumulating cash and they seem to be doing one of two things: either buying companies or buying back their own shares. So, one of those two is a little bit better for what we do than the other, and that is obviously buying companies.
Zezas: And, you’ve seen more activity where you’re being called in on behalf of publicly-held companies or privately-held companies?
Atkinson: Both actually. Privately-held, it might be a portfolio company of a private equity firm. And, then publicly-held companies just because they seem to be doing so well, as I said earlier, in terms of profitability and having that ability to act very strategically in a time that’s probably a good time to buy certain assets.
Zezas: Mark, let me ask you this last question. If we were to leave the viewers, specifically finance executives, with one thought as it relates to the future, the way the economy is taking off, and the importance of proper evaluation. What would you say to them?
Atkinson: I think mainly, and this has changed again, credibility is more important than ever. Since Sarbanes-Oxley, for what we do, the reviews, the process, that’s put forth by the accounting firms has become- it’s not a challenge to our organization because we’ve been doing this significantly for the last, at least two decades now, with the members of the team. But, the scrutiny has increased quite significantly for the breadth of companies. Previously, technology companies tended to get a little more scrutiny, but now I think the entire spectrum of industries needs to be very careful.
Zezas: I think you’re right. Well listen, Mark, I want to thank you very much for your insights on the importance of evaluation on the growth of business. I think this will be of tremendous interest to our viewers. I want to thank you for taking your time to be out here on CFO Studio.
Atkinson: Thank you, Andy. Thanks for having me.
Zezas: This is Andrew Zezas, your host at CFO Studio, saying thank you very much for watching. We’ll see you again.
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