Clifton Gunderson, LarsonAllen to Merge, Create Top 10 Firm

BY JEFF DREW

Top 20 accounting firms Clifton Gunderson and LarsonAllen said Tuesday that they plan to merge Jan. 2, 2012, creating one of the 10 largest CPA firms in the country.

The new firm would take the name CliftonLarsonAllen (CLA) and boast more than $550 million in combined revenue. CLA would have more than 500 partners, employ more than 3,600 professionals and operate from offices in 25 states and the District of Columbia.

Kris McMasters, CEO of Milwaukee-based Clifton Gunderson, and Gordy Viere, CEO of Minneapolis-based LarsonAllen, would both be CEOs in the new firm, which would consist of three entities inside a holding company. Viere would take the helm of the holding company as well as two specialty practices: CLA Wealth Advisory and CLA Outsourcing. McMasters would lead CLA LLP, the new firm’s public accounting practice.

Milwaukee and Minneapolis would serve as co-headquarters for the firm.

The partners at Clifton Gunderson and LarsonAllen still need to approve the merger, which also must win the blessing of either the U.S. Department of Justice or the Federal Trade Commission under the Hart-Scott-Rodino Act, according to Clifton Gunderson spokesperson Jennifer Dirks.

Clifton Gunderson and LarsonAllen said that CLA’s wealth management practice would have nearly $3 billion in assets under management, ranking it among the top three in the accounting industry. The outsourcing practice would be a $50 million business focused on helping clients with financial, reporting and tax regulatory compliance issues.

“Coming together heightens our capacity to develop that vital focus and extend it beyond our accounting and advisory services to our wealth management and outsourcing capabilities,” Viere said in a press release. “This cohesive trio of industry-focused guidance is uncommon for private businesses and public-sector organizations. It’s a powerful new resource for them.”

The new firm plans to build upon its predecessor firms’ specializations in private companies and industry niches such as health care, banks and credit unions, governments, nonprofits, manufacturing and distribution, construction, real estate, agribusiness, and employee-benefit plans.

“This merger of peer firms changes the landscape of the accounting profession and pioneers a new trend by focusing primarily on private companies and their owners,” McMasters said in the press release.

Clifton Gunderson, founded in 1960, and LarsonAllen, founded in 1953, each have about 1,800 professionals on staff. Clifton Gunderson, with $253 million in revenue and 47 U.S. offices, employs more than 680 CPAs. LarsonAllen, with $285 million in revenue and 40 U.S. offices, employs more than 870 CPAs.

Deal Would Be Biggest of Recent Merger Rush

With both firms reporting revenue in excess of $250 million, the Clifton Gunderson-LarsonAllen merger would be the largest in a flurry of mergers-and-acquisitions activity over the past couple of years, said Terrence Putney, CPA, president of Transition Advisors, a firm that works with accounting firms on M&A deals. He was not involved in the Clifton Gunderson-LarsonAllen deal.

“This is obviously the biggest one that has happened in recent memory,” he said. “I think it is absolutely not the last one we’re going to see. There’s a pretty big shift going on at the top of the profession. The top 20 firms are really fighting for their turn to create the next level of national firm.”

With the merger, CLA would be poised to compete, Putney said, with the likes of BDO, CBIZ/Mayer Hoffman McCann, Crowe Horwath, BKD and even billion-dollar firms McGladrey and Grant Thornton.

LarsonAllen has been active in the merger market over the past two years. LarsonAllen established a West Coast presence in 2010 by merging with LeMaster Daniels of Spokane, Wash. LarsonAllen also merged with Chicago-based Africk Chez in 2010.

Earlier this year, Dixon Hughes merged with Washington-based Goodman and Co. to form Dixon Hughes Goodman, a 1,700-employee firm with headquarters in Charlotte, N.C. In late 2010, Melville, N.J.-based Marcum merged with Los Angeles-based Stonefield Josephson, giving the 1,100-employee East Coast firm a West Coast presence and a new name, MarcumStonefield. That deal was Marcum’s fifth merger in 29 months.

For more on the Clifton Gunderson-LarsonAllen merger, go to www.cpamergermedia.com.

Jeff Drew is a JofA senior editor. To comment on this article or to suggest an idea for another article, contact him at jdrew@aicpa.org or 919-402-4056.

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