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Accounting M&A deals adding up Firms hungry for growth gobble up others at fast pace By MICHELLE PARK LAZETTE mpark@crain.com
Each time Allan D. Koltin asked for a show of hands, it reaffirmed what he’d already begun to see. While presenting at a conference of the American Institute of Certified Public Accountants in January, Mr. Koltin asked the room of CEOs,
who represented roughly 75 of the largest accounting firms in the country, three questions. How many of you count mergers and acquisitions as part of your strategic growth plan? Almost every hand went up. How many of you plan to consummate a deal in 2013 or 2014? Again, a near-unanimous show of hands. How many of you are in talks with another Top 200 CPA firm, meaning those with revenues of $13 million or more? Two-thirds of the hands were raised. See MERGERS Page 21
STAN BULLARD
The Worthington Building is located at 621 Johnson Court in the Warehouse District.
Medical device startups WORTHY ADDITION TO facing financial hurdles
WAREHOUSE DISTRICT
Project reliant on tax credit would create apartments, condos and commercial space
By CHUCK SODER csoder@crain.com
If AxioMed Spine Corp. were founded today, there’s a good chance the developer of spinal implants wouldn’t secure venture capital financing, according to CEO Patrick McBrayer. Nationwide, the struggling ven-
By STAN BULLARD sbullard@crain.com
The residential revival of downtown Cleveland is on the cusp of reaching the Worthington Building, a little-known, five-story building at 621 Johnson Court — an address technically in the middle of an alley between West Sixth and West Ninth streets in the Warehouse District. A plan for restoring the hulking, century-old property as 89 residential units and 33,000 square feet of commercial space is among the applications for the intensely competitive round of state Historic Preservation Tax Credits that closed Sept. 30 and will be awarded by year’s end. Neil Viny, a principal of the Dalad Group real estate concern that controls the building through the Old Cleveland Properties and various limited partnerships, sums up succinctly how important the state tax credit is to his group’s plan.
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See WORTHY Page 22
Sagging venture capital business often prefers to back early-stage IT companies ture capital business has been shying away from putting money into early-stage medical device companies. That’s especially true of companies facing big regulatory hurdles, such as AxioMed in Garfield Heights, which has raised $65 million in venture capital since 2001. See MEDICAL Page 11
MONEY MATTERS A look at the investments in software and medical device companies in the U.S. since 2007:
Software companies
CONTRIBUTED PHOTO
The Dalad Group’s Worthington Building project would transform the century-old structure into 89 residential units and 33,000 square feet of commercial space. There would be 14 condominiums atop the building.
Medical device companies
Year
Investment
Deals
Investment
Deals
2007
$6.195 billion
1,076
$3.704 billion
396
2008
$6.033 billion
1,113
$3.607 billion
397
2009
$4.109 billion
831
$2.558 billion
341
2010
$5.295 billion
1,058
$2.331 billion
344
2011
$7.761 billion
1,244
$2.882 billion
366
2012
$8.582 billion
1,364
$2.474 billion
318
2013
x-$8.164 billion
1,109
x-$1.609 billion
207
■ Source: MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association, using data from Thompson Reuters. ■ x-First three quarters
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INNOVATION Northeast Ohio leaders discuss how they attract and motivate creative minds ■ Pages 15-19 PLUS: HIGHER ED’S ROLE ■ CREATING A NEW CULTURE ■ & MORE
Entire contents © 2013 by Crain Communications Inc. Vol. 34, No. 42