BKD AGREES TO ACQUIRE LOEB & TROPER
JULY 13, 2018
With both firms approaching their 100th anniversaries, BKD, LLP (www.bkd.com), a national CPA & advisory firm based in the mid-west has agreed to acquire Loeb & Troper LLP. (www.loebandtroper.com) in New York, New York.
BKD, a member of Praxity, the world’s largest alliance of independent accounting firms, has 36 U.S. offices and almost 2,700 employees with over 30,000 clients around the globe. Its specialty service areas include clients in the healthcare, not-for-profit, higher education, governmental sectors and private equity.
Loeb & Troper, the local market leader in providing audit, tax and consulting services to the health care, managed care, special needs, not-for-profit and education sectors.
“With a broad menu of services and deep credentials, the BKD brand provides Loeb & Troper clients and staff, as well as the New York Metropolitan Area healthcare and not-for-profit sectors at large, a mid-sized service provider with distinctive capabilities. This transaction presents a truly terrific opportunity for all.” said Domenick J. Esposito, Chief Executive Officer of ESPOSITO CEO2CEO, LLC, who introduced the two firms to each other and consulted on the strategic transaction.
ESPOSITO CEO2CEO, LLC is a boutique advisory firm that consults to leading CPA and other professional services firms on strategy, succession planning and mergers, acquisitions and integration. Dom Esposito, founder, was voted as one of the most influential people in the profession for two consecutive years by Accounting Today. The firm publishes a bi-weekly newsletter on perspectives and insights for leading CPA firms who want to “run with the big dogs” and develop their firms into sustainable brands. Subscriptions can be made by going to www.espositoceo2ceo.com. Dom authored a book, published by www.CPATrendlines.com., entitled “8 Steps to Great” which is a primer for CEOs, managing partners and other senior partners.
Podcast – A Strategy for Strategic Retreat (June 12, 2018)
“Recently I had the pleasure of doing a podcast on strategic retreats with Dan Hood of Accounting Today. If you have 15 minutes, you might want to listen for our insights and perspectives. If you would like to discuss, please feel free to contact me at either (t) 203.292.3277 or at (e)firstname.lastname@example.org.”
PODCAST – Accountability in Accounting (May 11, 2018)
For accounting firms to be more than just a group of people who happen to share the expense of a copier, there needs to be a way to hold the partners accountable to the firm’s larger goals — and CEO2CEO founder and firm consultant Dom Esposito has some tips on how to do it.
I recently had the pleasure of doing a podcast at Accounting Today. It addresses accountability in a CPA firm. I thought that you might find it informative. Please listen when convenient. If, as a result, you would like to discuss any aspect of its contents, please feel free to reach out to me at email@example.com. #accountability
Prager Metis CPAs, LLC Expands Business Management Expertise; Merges with Geibelson, Young & Company
January 15, 2018 – New York, NY— Prager Metis CPAs, LLC, a leading accounting and advisory firm with offices North America, Europe, and Asia, and a member of GGI International with members in 123 countries, announces their combination with Geibelson, Young & Company a business management firm based in Woodland Hills, CA. The combination is official as of January 1, 2018. The deal was brokered by Domenick J. Esposito, CPA of ESPOSITO CEO2CEO, LLC.
We will retain their Woodland Hills office, expanding the Prager Metis presence in the Los Angeles area to three offices including El Segundo and West Los Angeles. Melody Young will join Prager Metis as a Principal. She will be a member of the Business Management Group.
“We welcome their addition,” says Joseph Rust, Managing Partner of the Prager Metis office in Los Angeles, CA. “We’re excited that this merger enables us to serve our entertainment clients better in the Los Angeles market, as well as nationally and internationally, and for the Geibelson, Young clients, joining forces establishes a deeper breath of support and services.”
“Bringing Melody and her team on board is essential to our plans to expand our resources and further strengthen our reputation as the “go-to” expert in entertainment business management,” says David Neste, Co-Managing Partner. “With her extensive background in the entertainment industry, Melody has a unique expertise that few possess.”
Geibelson, Young & Company is a full-service Entertainment Business Management firms that have been an active financial resource for entertainers for over 20 years. Additionally they provide tax consultation and preparation for individuals and corporations in the entertainment, creative arts and other freelance industries.
“Prager Metis has a strong presence in the entertainment industry and extensive experience in many other areas,” says Young. “The depth of their expertise in tour accounting, international tax law, and vast auditing capabilities will benefit my clients immensely. I’m very excited to join the Prager Metis team.”
November 13, 2017: ESPOSITO CEO2CEO, LLC is pleased to announce that we are now able to offer our clients sales, marketing and operational consulting services through a new strategic alliance agreement with LVG Advisors. To learn more about these capabilities, please visit LVG Advisors’ website at www.lvgadvisors.com.
DOM ESPOSITO, CEO, WILL BE FEATURED SPEAKER AT AN UPCOMING
DFK/USA LIVE WEBCAST
January 26, 2017
ESPOSITOCEO2CEO, LLC is pleased to announce that Dom Esposito, CEO of ESPOSITOCEO2CEO, LLC will be the featured speaker at the January 30 DFK/USA Human Resources Committee webcast on developing the next generation of partner leadership in a firm. The webcast, entitled “Building a Leadership Development Academy”, will be given to approximately 15 HR executives throughout the DFK network of firms.
Dom would be happy to share the contents of the webcast with other firms who would like to learn about the merits of a partner candidate development academy. Feel free to contact Dom directly at (e) firstname.lastname@example.org or at (t) 203.292.3277.
EQUALE & CIRONE, FRIEDBERG, SMITH & CO. COMPLETE COMBINATION, ANNOUNCE NEW NAME
NOVEMBER 1, 2016
ESPOSITO CEO2CEO, LLC is pleased to announce that the Bethel, CT based accounting firm of Equale & Cirone, LLP, established in 1999, and the Bridgeport, CT based accounting firm of Friedberg, Smith & Co., PC, established in 1945, announced today that they have combined their practices to form Cirone Friedberg, LLP.
Cirone Friedberg, LLP has 39 staff and seven partners. The firm will offer comprehensive accounting, tax and advisory services to owners/operators of commercial enterprises in a multitude of industries and to non-profit organizations and high net worth individuals.
“It’s a wonderful blend of two complementary firms” said Anthony Cirone. “Both firms are committed to and share a common culture of providing clients with personalized expertise and staff with fulfilling careers”. Together we can best offer the resources and specialties of a larger firm coupled with the responsiveness of a local firm, giving us a distinct advantage in Fairfield County”.
“While the two firms signed the combination agreement only recently, we have been working quietly on combining the two firms over the past six months” said David Zieff. We expect that the combination will be a seamless transition for our clients and staff”.
“I watched how these two firms dealt with the important matters in their desire to create a special firm for their clients and staff” said Domenick J. Esposito, Chief Executive Officer of ESPOSITO CEO2CEO, LLC, who consulted with both firms on the combination. “The combined firm now plans to strengthen their expertise in a number of service lines and anticipates that it will do a number of practice acquisitions after the integration of the new firm is completed.”
The new firm expects to retain all of its current staff and will be recruiting for additional hires in the near future. In the near term it will maintain its offices in Bethel and Bridgeport and will evaluate it space options as current commitments expire.
Don’t Doom Your Firm with Inflexible Growth Strategies
Profitability may mean taking an unexpected turn.
A Guest Column by Dom Esposito
Appeared in Public Accounting Today
September 2016 | Volume Xl, no. 9
By Dom Esposito, CEO
Imagine that you—a CEO or managing partner at one of the 14,000 multi-partner CPA firms— are sitting in a conference room with your partners going over key performance metrics.
It is becoming increasingly obvious that your accounting firm—which performed quite well pre-financial crisis circa 2007 and 2008 with a strategy of getting bigger (with quality growth), stronger (with quality talent) and more profitable—is having a very difficult time competing in the mid-market owner/operator client space.
The business environment is anemic. Organic growth is hard to come by. Margins are razor thin. Talent, particularly tax talent, is scarce. The challenge is exacerbated when you look around the conference room and see an insufficient number of young superstars and rainmakers, and your se-nior partners—mostly baby boomers—don’t have an awful lot of “golf course” left to play.
Add these factors up, and you and your partners are coming to the realization that quality organic growth at a decent rate (about 6% to 8%) is not going to happen in 2016 and in the foreseeable future. Inevitably, your discus-sion turns to the topic: If we are struggling in achieving our “Plan A—Go it alone” strategy, is it time to start looking at a “Plan B” strategy?
We refer to this process as “the lifecycle to yes for an upward merger”. Feel and sound familiar?
Only 100 CPA firms in the U.S. are generating at least $33 million in revenues. Regardless, if you are generating more or less than $33 million, it is more likely than not that you are enjoying your independence, culture and ability to control your own destiny. So, the first consideration for a
“Plan B” strategy is usually not to explore an upward merger. Instead, the chosen path is to find either smaller firms to tuck in, or to acquire one- or two-partner firms that are looking to monetize their assets (that is, their client list and their people).
It’s a very understandable path to take. You are the larger, stronger firm. You can maintain your independence, culture and ability to control your own destiny. If you can add some critical mass and pay a reasonable price for it, you might get back on the track to achieving some nice growth and additional profits for your partners. Sometimes this result follows, but often, it doesn’t.
Small, one- or two-partner tuck-ins or acquisitions are risky business fraught with problems and obstacles. Oftentimes, quality of the work product and the people do not meet your firm’s standards. Clients from the tuck-in or acquisition begin to hear rumblings about unhappiness, and inevitably, it spills over to client satisfaction.
At the end of the day, these acquired clients can be easily lost as partners either retire or leave your firm. You couldn’t sustain the growth you were hoping to achieve, and you and your partners were distracted from the real goal of perpetuating the firm for the long term.
My experience is that small firm tuck-ins and/or acquisitions of one- or two-partner firms usually don’t build any long-term brand value and accretive profits to the partners.
So a couple of years later, you are back in your conference room with your partners, and you are evaluating both your “Plan A” and your “Plan B” strategies. And you reach the conclusion that neither is working to your expectations.
Now it’s time to make some tough decisions. And while an upward merger was initially not a desirable “Plan B“ strategy, you realize that it just might be a much more at-tractive alternative path—especially when you realize that in January 2016 alone, there were more than 22 mergers, including at least 13 at the Top 100 firms. So, it is obvious that growing a CPA firm in this environment inevitably brings CEOs, managing partners and other senior partners to the crossroads of a merger combination.A word of caution, however: Don’t do a merger combination if 1+1 doesn’t at least = 3.
When you decide that an upward M&A strategy is the right path for you, like everything else, you need a plan. Let’s presume you decide to pursue a transaction in your existing geographic market. The first step is to make contact through a reach-out program consisting of:
- picking up the phone and introducing yourself, explaining why you are calling and requesting to meet to discuss the merits of exploring a transaction;
- attending state society managing partner meetings; and
- attending trade and AICPA meetings, such as the semi-annual Major Firms meetings in Florida and California (for firms with $20 million in revenues or more).
Over time, this process usually results in the identification of several potential target candidates. Before you de-cide whether to proceed to due diligence or not with any of the candidates, make sure the target opportunity feels right.
How do you do that? You do it by you and several of your key partners meeting and getting to know the key partners at the target firm. You talk about respective histories, cultures, “sacred cows” or “must-haves” in a possible transaction and the potential upside and synergies that might be realized. This collaboration has to be the magic sauce that will make a possible transaction very exciting. The courtship or romance period usually takes several meetings over a few months, with very active participation from both sides and working groups getting comfortable with each other.
The next step is to create broader buy-in. A meet-and-greet with all the partners of both firms is very advisable.Valuable input can be obtained when you establish several committees that plan for integration in all areas of the business, including:
- human resources and continuing education,
- information technology,
- marketing and sales,
- finance and accounting, and
- partner matters.
Now due diligence starts from three perspectives: Culture fit,Commitment to technical excellence and quality client service, andKicking the financial tires.
At this point, you should have the framework of a transaction. Any potential deal-breakers should have been addressed and successfully dealt with already. With the assistance of attorneys, it is time to draft a letter of intent, followed by a detailed combination agreement.
The moral of the story is that “the lifecycle to yes for an upward merger” takes a very long time—much longer than it needs to take because many firms refuse to come to the realization that a dual strategy should always be pursued.
“Plan A” is the “go it alone” strategy, and “Plan B” is the “upward merger” strategy. Run both tracks simultaneously. Don’t get distracted by tactics that history has shown us generate little, if any, long-term value to you and your partners.
Dom Esposito is CEO of EspositoCEO2CEO, LLC, an advisory firm that consults with CPA firm CEOs, managing partners and senior partners. He recently authored a book, “8 Steps to Great” which is a primer that provides tips on how to “run with the big dogs.” Contact him at www.espositoceo2ceo. com or at email email@example.com.
Merger & Acquisitions Workshop: Staying Independent, M&A Opportunities, and Pitfalls to Avoid
The date for the upcoming Rainmaker Companies Merger & Acquisition Workshop: “Staying Independent, M&A Opportunities, and Pitfalls to Avoid” has been moved to October 5, 2016.
We know that a number of you were interested in this workshop (where Dom Esposito will be a featured speaker together with Dan Brooks) but the original August date did not work because of vacations and other previous commitments.
Therefore, with this new rescheduled date, we hope you will join Dan Brooks and Dom Esposito on October 4th for an optional dinner and then on October 5th for the workshop from 8:00am to 3:00pm in Nashville, TN.
To learn more and register, click here: http://www.cvent.com/d/zvqjt0
The early bird discount has been extended to August 13th.
Also, stay tuned for workshop style sessions in the upcoming months. In February, Rainmaker will be hosting a session around transitioning from a traditional accounting firm model to a professional advisory firm model. Again, I will be a featured speaker.
We will have more information on this to you soon.
As you know, the M&A arena in the accounting profession is growing at an unprecedented rate and it is anticipated that this upward trend will continue for the next several years. As baby boomers continue to retire, margins stay under pressure and talent continues to remain scarce. We believe that now is the opportune time to bring together a select group of managing and other senior partners who have gone through a merger, are currently, or about to embark in the process to create a dialogue and strategy session of insights and best practices.
Dom and Dan have been in the accounting profession and the merger and acquisition space for quite some time. Through trials, errors and successes we have learned throughout the years the value of remaining independent while, at the same time, pursuing a M&A growth strategy. We hope you, and your senior partners, will join us for this interactive workshop as we facilitate roundtable discussions and hands-on solution development activity around strategy, independence and mergers and walk away with a customizable cultural assessment tool for your firm.
The flyer below contains more information on topics to be covered in this workshop. To learn more, please visit the Rainmaker Companies’ website below.
Presented below are helpful links:
The Rainmakers Companies home page: Http://www.therainmakerscompanies.com
The Rainmakers Companies Merger and Acquisition flyer: http://www.cvent.com/d/zvqjt0
Hope to see you there.