Lead Story

Mergers and Acquisitions and Alliances, Oh My!

The headlines continue in the growing trend toward mergers, acquisitions and other forms of alliances between local CPA firms and their larger partners.

  • January 2013: Sullivan & Company, one of the largest and best-known accounting names in Rhode Island, has merged into BlumShapiro. This merger makes BlumShapiro one of the Top-60 accounting firms in the nation, with 340 employees throughout New England.
  • January 2014: Marcum LLP, a top national accounting and advisory firm, announced a merger with Braver PC, a full-service regional accounting firm. Fourteen Braver partners and over 100 staff have joined Marcum’s New England region which now has six locations. 
  • September 2016: LGC+D is pleased to announce that the firm has joined top-25 accounting firm Citrin Cooperman.  LGC+D’s 60 firm members include partners, professionals and support staff.

We talked to the partners-in-charge of the Providence offices of these three firms about today’s competitive marketplace and, specifically, the impetus for their alliances, how things are going for clients and staff, and what’s new.

1. ABOUT YOUR MERGER/ACQUISITION: Your firm was and is well-regarded in the regional marketplace. What was the thinking that led your firm to make the decision to merge?

RichardRICHARD DERIENZO/CITRIN COOPERMAN: We looked at the landscape and what lies in front of us as a firm, with the understanding that the world is pretty complex; we wanted to bring assets to clients and provide expanded opportunities to our staff like expanded education and training. Citrin Cooperman had the most upside potential.

We began a search for a firm that would take, what we believed, was a solid and client-centric foundation and expand our capabilities to serve our clients and grow our firm members.  We found these shared values in Citrin Cooperman.

GREG CABRAL/BLUMSHAPIRO: Both the accounting field, as well as our client’s businesses, have become very technical and specialized. The decision to merge was based upon our desire to have a wider array of services and a broader depth of expertise, allowing us to better service our clients.  Additionally, it allows us to hire and retain top talent because of greater advancement opportunities.

JIM WILKINSON/MARCUM: The decision to even contemplate an upstream merger was carefully evaluated by our executive committee and partner group. Even with the success we had experienced in building the practice, in earning our reputation for quality and innovation, and advising clients on meeting their own goals for growth and success, there was an overall concern regarding our ability to keep pace with the sophistication and service offerings that our clients would require as they continued to expand and grow.

Our process to identify and evaluate potential candidates and negotiate the merger lasted just over 18 months. In addition to reviewing the wide range of services offered by all of the firms, we invested a great deal of time and effort getting to understand the culture and values embodied in each firm’s leadership and operations. Some of the other more significant factors considered in our evaluation process included: resources and programs for staff development and training, marketing and sales programs, technology and systems, staff recruiting strengths, client industry experience to complement our own, and partner retirement and succession provisions. Nearly three years after our merger, this process has proven to be effective and Marcum LLP was clearly the best choice for our continued growth.

2. ABOUT YOUR EMPLOYEES: Company cultures for small firms are family-like but in today’s world there are economic advantages to be part of a larger firm.  How are your employees faring in the transition?

JimJIM WILKINSON/MARCUM: While we are part of a large, national firm now, none of our offices are so large that our employees lose their identity as respected and valuable members of our team. It has been rewarding to see our collaborative atmosphere and balanced culture preserved, and even improved, in our new, larger practice. While our operations are now more structured with defined audit and tax departments, and client-focused industry groups, our partners and managers continue to work closely with our team members. We have active programs aimed at managing workload compression, developing future leaders, and promoting diversity and inclusion (to list just a few). Of course, transitions, changes, and the “unknowns” brought about by mergers do cause stress on team members and we have experienced an expected amount of turnover. However, we are also now seeing some former staff returning to us -- we call them boomerangs -- after exploring other opportunities. The one piece of advice I would give to the newly-merged or acquired is to have an open mind and never lose sight of the benefits that contributed to the decision to merge.

RICH DERIENZO/CITRIN COOPERMAN: Being less than sixty days into the process, it is still very new to all of us.  We’ve definitely experienced the concerns associated with change and have also seen the benefits of being part of a resource-rich organization.  Citrin Cooperman has a history of integrating firms of our size, whose client bases mirror ours, so we’ve had a lot of support.
We have not had any attrition. We are helping build out Citrin Cooperman’s New England presence so we have an important role. In fact, we already have at least a half-dozen people engaged in firm-wide initiatives. We are doing everything we can to help our people see the potential and deal with change, both personally and professionally.
GREG CABRAL/BLUMSHAPIRO: Because BlumShapiro allows each office to operate autonomously, I believe we have maintained our “family-like” environment. We continue to foster that environment by ensuring that, when hiring, we look for personalities that will work well with our existing employees.  A tremendous benefit of becoming part of a larger firm are the opportunities for advancement and experience in different industry groups. 

3. ABOUT YOUR CLIENTS: Clients develop strong relationships with their financial advisors and, obviously, you don’t want to interfere with those relationships. What impact does your expansion have on your clients?

GregGREG CABRAL/BLUMSHAPIRO: Clients do develop very strong relationships with their accounting/financial advisor and we did not disrupt any of those relationships.  The partners/managers that worked with them prior to the merger are the same people working with them today, but with a benefit: our people now have the ability to bring additional expertise to these relationships. In addition, our new professional office space in Cranston allows plenty of room for our expanded team. Over the last three-plus years since the merger, we have grown from 70 to 80 people and we anticipate continued hiring.

JIM WILKINSON/MARCUM: The consistent message to our clients was that while the firm name on our business cards was changing, the personal relationships that we built would not be affected. In fact, these relationships have only gotten stronger as we have introduced greater depth-building service teams with more specialization and abilities, and introduced additional leaders with resources to provide value beyond our traditional, pre-merger services.

RICH DERIENZO/CITRIN COOPERMAN: Our clients and our people are our top priority.  We would not have joined Citrin Cooperman if we did not believe it would also expand the value to our clients.    Maintaining our interactive relationship with our clients, while having the ability to access increased depth of experience, talent and scope of services through our newly expanded footprint, will enhance our ability to help our clients deal with the wide array of opportunities and issues that exist in today’s business environment.  We are an organization whose focus is middle-market business; our clients will benefit from our understanding and communicating of trends and changes that will affect their businesses, and translating this knowledge into actionable steps for them.   

4.  OTHER NEWS: Will your new firm be offering expanded services, additional customer service features, … or anything else you would like to share?

RICH DERIENZO/CITRIN COOPERMAN:  Over the past couple of years, we, locally have developed cyber security and outsourced financial services offerings that are being integrated into the firm’s fabric.  Also, our clients now have expanded and deeper access to experts in state and local tax expertise, valuation and forensic services, international tax consulting, and several other areas.  Our clients in health care, real estate, construction and commercial enterprises will benefit from integrated regional practices and deep expertise.

GREG CABRAL/BLUMSHAPIRO:  As part of a larger firm, we are seeing opportunities to expand into new industries and providing additional services to our current client base.  We are excited about some of the new areas our consulting practice is entering such as cyber security and back-office processes that could really transform how companies operate.

JIM WILKINSON/MARCUM: We see a lot of activity in some of our expanded service areas such as R&D tax credits and on the international front. More and more smaller businesses are importing and exporting, or making and settling payments in foreign currencies, and require assistance navigating the associated accounting and tax complexities.  In addition, while we did have a small SEC practice prior to the merger, we are now a part of the seventh largest (and fastest growing) public-company audit practice in the country. Some SEC registrants in the RI area have us as an A-1 local resource; they don’t need to go to Boston on New York.

A CPA Practice newsletter notes that according to the 2015 Accounting Firm Operations and Technology Survey, 37.7% of respondents said yes when asked if they’ve considered growth via merger or acquisition—an increase of 3.5 percentage points over 2014. With more than one-third of respondents considering this option, M&A in the accounting profession is certainly a trend that continues to be on the rise.




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