M&A

David Carlino

David Carlino, CFO of CannonDesign, knows a thing or two about dealmaking.

Over the last two years and change, Carlino has guided the architecture and design firm through eight acquisitions. Through those deals, he’s helped the firm expand client offerings to include consulting services instead of strictly design work.

But the M&A landscape for architecture and engineering firms has also changed. “In the past two to three years, I’ll say probably more in the last two years for us, the amount of activity has gone crazy,” Carlino said.

In particular, “private equity is a big competitor of ours when it comes to acquisitions now. That [competition] wasn’t there five, 10 years ago,” Carlino told CFO Brew. “They were buying some engineering firms, but not so much architect firms.”

While CannonDesign probably can’t compete with PE on price, the firm has a strategy to set itself apart from those deep-pocketed buyers. The long and short of it is: CannonDesign can offer sellers some things that PE cannot, Carlino said.

How to be honest with sellers that are pursuing potential PE buyers.—AZ

      

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COMPLIANCE

Colin Anderson Productions Pty Ltd/Getty Images

More public companies are getting proactive on regulatory changes that could impact capital markets and are more focused on AI-related risks, according to the Center for Audit Quality’s (CAQ) latest Audit Partner Pulse survey released on Wednesday.

The spring survey, fielded in May, garnered 589 responses from audit partners. It found that nearly two in five (39%) respondents said their clients were “seeking guidance on expected regulatory changes,” compared with less than a quarter (23%) of respondents in the fall survey.

These public company auditors indicated their clients were also responding to expected legislative and regulatory changes through M&A or other capital investments (26%), expanding or pivoting their investments to new opportunities (22%), and freezing or limiting hiring (20%). More than a quarter (27%) said their clients aren’t doing anything in response to expected changes.

Indeed, regulatory change is afoot. The SEC is busily working to roll back various reporting requirements, as CFO Brew recently detailed. While the reforms could mean less work for reporting teams, they can also introduce new risks.

The CAQ survey findings showed “a shift from holding steady to moving forward with greater intent” among public companies, “even as uncertainty remains,” Amy O’Connor, CAQ’s VP of public affairs, said in a statement.

Auditors say clients plan to voluntarily increase AI disclosures.

      

SOFTWARE

Illustration: Brittany Holloway-Brown, Photos: Adobe Stock

Like broccoli on a finicky toddler’s dinner plate, AI features in business software are often left untouched.

According to a recent Banyan Software report, 51% of business software operators saw fewer than one in four customers use the AI capabilities that shipped with a software product. The findings are based on more than 260 survey responses from founders and CEOs of software companies that focus on vertical markets (i.e., specific industries).

What’s the cause? Max Risen, Banyan Software’s president of M&A, told IT Brew the low usage rates of AI features likely stem from companies “building for the sake of building and not necessarily building to solve specific problems.”

Risen added, “They’re building things that they think are really cool that customers will want, but more often than not, we found that they’re missing the mark of actually driving customer value.”

Déjà vu. Piyush Patel, chief ecosystem officer at AI search and retrieval platform Algolia, told IT Brew the issue of unused features is an old software industry problem, and has largely been driven by factors like industry competition and revenue pressure.

AI worsens feature overload, IT Brew reports.—BMs

      

Sponsored By Sage

What’s the trade-off? Yes, AI speeds up finance work. But finance leaders now spend about 13 hours a week verifying AI outputs. New IDC research, sponsored by Sage, breaks down why verification is one of the biggest barriers to productivity and how finance-grade AI helps close the gap. Check out the findings.

market forces

Francis Scialabba

Today’s top finance reads.

Stat: $2.4 billion. That’s how much Visa is spending for cybersecurity company BioCatch, whose tech analyzes “behavioral biometrics” to differentiate humans from bots. 🤖 (CNBC)

Quote: “Consumers aren’t sure what’s right anymore so, out of an abundance of caution, they’re just passing on everything.”—Joelle Mosso, science and food safety lead at Western Growers. Farmers are pulping lettuce in the fields as consumers shy away from the leafy vegetable. 🥬 (Wall Street Journal)

Read: Kevin Warsh is considering holding fewer than eight Fed meetings a year. (New York Times)

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EVENT

MB

Some spreadsheets spark joy. Others spark follow-up meetings. Join us on Sept. 2 to learn how finance teams are building decision-grade data they can actually trust. Register here.

Jobs

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