More Accounting Firms Tying the Knot
The new year has seen a flurry of announcements of mergers in the accounting industry, with local firms in Washington State and Colorado finding the right match, while KPMG has turned over its Compensation and Benefits Tax Practice to a proper suitor, Smart and Associates, LLP, for an undisclosed sum.
Comrie Accounting Services in Grand Coulee, Washington, joined its practice with LeMaster & Daniels PLLC, effective January 1. Owner David Comrie said that his firm was attracted to LeMaster & Daniels’ depth of services, and that the new, combined firm would provide his clients access to new and more sophisticated resources. LeMaster & Daniels, founded in 1908, has 13 offices in Washington and Idaho and welcomed the opportunity to expand into Grand Coulee, said Scott Dietzen, CEO, StarOnline in Grand Coulee reports.
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In Denver, Anton Collins Mitchell LLP (ACM), a member of the BDO Seidman Alliance (BDO), has merged with McCutcheon & Company, a Denver CPA firm that specializes in providing audit, tax and consulting services to the nonprofit sector. Businesswire reports that Tim McCutcheon has become a partner in ACM. “Adding Tim, his staff and his nonprofit clients to ACM is a significant move for our firm," said Gary Mitchell, ACM’s managing partner. ACM employs more than 60 people in Denver and was recently recognized by BDO as its fastest growing alliance member.
SMART, the acquirer of KPMG’s Compensation and Benefits Tax Group, is comprised of over 550 professionals and staff, and has offices in Atlanta, Baltimore, Chicago, New York and Philadelphia, with an international presence in Amsterdam, the firm’s Web site says. Judy Thorp, former partner-in-charge for the KPMG Group, will be national partner for the new group.
What’s driving the urge to merge beside the examples of AT&T and SBC Communications and Disney and Pixar? One factor for accounting firms may be the need for a succession plan or exit strategy, Crain’s Detroit Business says. “Succession has traditionally been a reason to try to do mergers,” said Kevin McKervey a shareholder at accounting firm Clayton & McKervey P.C. in Southfield. Acknowledging the succession issue can cause problems within the firm, McKervey said. His own firm has a succession plan.
Some firms combine with others because of what they have in common, like Reinsel & Co, LLP and Kuntz Lesher LLP in Southeastern Pennsylvania, Accounting Today reports. The two firms, now operating as Reinsel Kuntz Lesher LLP, were similar in size, clients and specialties and merged in order to strengthen their marketing position in the region. J. Andrew Weidman, chairman and chief executive of the new firm said that the merger will also help the firm recruit new talent. “Some of the offers we were making were getting rejected because the candidates went with larger firms.”
Accountants in Silicon Valley have seen few mergers, and are not convinced that consolidation is the answer to regulatory changes resulting from the Sarbanes Oxley Act, the San Jose Business Journal says. “The biggest roadblock is the mindset of the owners of the smaller firms,” says Thomas Brewer, managing partner in Vavrinek, Trine, Day & Co.’s (VTD) San Jose office. “They fear giving up control, dealing with politics and that sort of stuff.” VTD has made four major acquisitions in the last decade, contributing to the firm’s growth. But Howard Loomis, president of the Silicon Valley CPA Society, says that few firms merge simply to get bigger.