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India’s increasing global significance and its critical role in world economy are undeniable, making it imperative for CLA Global to establish a presence in this market as part of its ambitious global expansion strategy, said G Scott Engelbrecht, chairman of the accounting and auditing network.

CLA Global is among the non-Big Four professional services networks, such as RSM, Baker Tilly, HLB, Mazars and Nexia, which, driven by the significant opportunities presented by India’s growing economy, are rapidly scaling up their presence in the country.

Last year, the network expanded its footprint in India, when the Baker Tilly India Business Advisory and Consulting Services team joined CLA Global as a member firm.

Within six months of joining the network, CLA Global Indus Value Consulting in India, the new entity, expanded to over 20 partners and 300-plus employees, offering advisory services across various domains like tax, cybersecurity, forensics, data and digital analytics, and technology implementation.

“Globally, we are structured into 14 industry groups across five service lines, and our India partners are also closely aligned to that structure. By leveraging common resources and services, we anticipate mutual growth and collaboration within our network,” said Engelbrecht.

The firm globally focuses on mid-market clients that are not yet listed and don’t face significant regulatory scrutiny, yet are rapidly growing and profitable – a segment that is quite large in India as well.

“Currently, CLA Global operates in 12 countries, and by the end of 2024, it aims to have a presence in 30 countries as the firm is conducting due diligence on potential partners in multiple countries,” said Joe Kask, co-CEO of CLA Global.

In India, the local network firm will be the one making investments in people, processes, and technology to scale up services.

“CLA Global Indus Value Consulting will be making investments in India, and as part of our network, these investments will be collaborative efforts. This is the essence of our global network – pooling resources for mutual investment,” said Engelbrecht.

As mid-sized professional services firms like CLA Global expand into new markets or scale up global operations in countries like India, many are opting for private equity infusions – for instance, Grant Thornton (US) and Baker Tilly US LLP – to provide growth capital.

In the future, will CLA Global consider taking private equity money to fund its growing operations and invest in technology?

“Historically, private equity investments in firms have often been driven by various factors, such as financial needs due to poor investments, succession challenges, or partners seeking to liquidate their stakes. While private equity offers attractive multiples, we believe that operating as independent partnerships globally allows for greater profitability and autonomy,” said Engelbrecht.

He added: “Partners of CLA US plan to invest $500 million into the firm over the next five to six years, with $85 million already invested this year alone.”

“This approach aligns with our belief in self-investment and maintaining independence,” said Engelbrecht.

  • Published On Apr 22, 2024 at 06:30 PM IST

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