M&A roundup: UHY, Sax and Clayton & McKervey expand

UHY, a Top 40 Firm based in Farmington Hills, Michigan, has expanded into Virginia by adding Ross, Langan & McKendree LLP, a firm in McLean.

The move is part of UHY's expansion efforts across the Mid-Atlantic. Financial terms of the deal were not disclosed. The merger will add three partners, one principal and 19 professional staff to UHY, which has a total of 1,449 partners and staff members. UHY ranked No. 29 on Accounting Today's 2022 list of the Top 100 Firms, with $221.5 million in annual revenue for 2021.

"We are beyond thrilled to have RLM join our UHY team," said Harold Mohn, Mid-Atlantic regional managing director at UHY Advisors, in a statement Monday. "One of the most important aspects of any combination is the culture of the firm that's joining your organization. RLM's culture aligns  with UHY, and we are truly adding a great team of people."

The RLM staff will continue working from their existing offices in McLean with UHY offices nationwide. UHY LLP and its affiliate UHY Advisors have 31 offices. 

"Our firm shares an undeniable chemistry with UHY and a mutual spirit of dedicated service for our clients," said RLM managing partner Colette Cahill in a statement. "We are pleased to bring our knowledgeable staff and critical resources together with UHY, and we are excited to build new relationships and expand our client success."

The RLM transaction is UHY's third M&A deal in a year in the Mid-Atlantic. UHY merged with TGM Group in Salisbury, Maryland last January and Stoy Malone & Co. in Towson, Maryland, in June. UHY combined with several other firms in other parts of the country last year, including LWBJ in Des Moines, Iowa, Jansen Valk Thompson Reahm in Kalamazoo, Michigan, and Patterson, Hardee, & Ballentine CPAs in Nashville, Tennessee. UHY said more combinations will be announced in the coming months.

Optimum Strategies CEO Ira Rosenbloom helped arrange the RLM deal by acting as strategic advisor to both firms.

Sax LLP, a Top 100 Firm based in Parsippany, New Jersey, has merged in Schall & Ashenfarb CPAs, a firm based in New York City, effective Jan. 1, 2023.

The deal represents Sax's fourth M&A deal in New York City since last year and expands the firm's nonprofit practice. 

Schall & Ashenfarb has been offering accounting services to nonprofit organizations in the Tristate area for over 30 years. Its clients include health and welfare organizations, arts and cultural institutions, and education organizations such as charter schools, private foundations, international organizations and religious institutions. 

"We are delighted to join the team at Sax LLP and provide our clients with additional resources and specialties that smaller firms do not possess," said Schall & Ashenfarb partner David Ashenfarb in a statement Friday. "Sax recognizes the excellent service we provide to our many clients and is dedicated to helping us maintain that high quality of work and responsiveness we are known for.  We expect a seamless merge of cultures and service philosophies, which was an important component when working to identify the partner that will take our S&A team to the next level."

Sax ranked No. 87 on Accounting Today's 2022 list of the Top 100 Firms. The firm earned $83 million in revenue last year and its projected 2023 revenues are $93 million. The firm has 53 partners, two senior advisors and 271 employees. Schall & Ashenfarb had $6.5 million in annual revenue last year and will add three partners and 18 employees to Sax. 

The deal bolsters Sax's nonprofit practice after three earlier M&A deals in the past year in  New York, but the latest deal is the biggest of the four. Last year, Sax added David Weiss CPA LLC, Steven Press, and KMR LLP.  As a result of the recent spate of deals, Sax has added a total of eight partners, two senior advisors, one director and 40 employees to its team. (From the David Weiss merger, two partners, one senior advisor and 15 employees joined Sax, and their firm had previously earned $5.5 million in annual revenue. From the Steven Press acquisition, one partner and one employee joined Sax, and their firm had earned $700,000 in revenue. From the KMR merger, two partners, one senior advisor and seven employees joined Sax, and their firm had earned $5.1 million in annual revenue.)

"Completing four mergers in six months has been no easy feat for our firm," said Sax LLP CEO and managing partner Joseph Damiano in a statement. "While expanding through strategic partnerships is a consistent growth goal we strive for, the most important factor is finding firms that align with our values and can easily fold into our operations. We were fortunate to come across Schall & Ashenfarb CPAs in our search.  They are truly dedicated to their principles of professionalism, responsiveness, and quality which is demonstrated in the results they deliver and their reputation in the region.  We are excited to welcome them to our firm and accomplish great things together."

The merger between Sax and Schall & Ashenfarb was brokered by Robert Fligel of RF Resources.  Sax now has three offices in New York and New Jersey, along with one international office in Mumbai, India and a remote team spanning 17 states and two countries.

Clayton & McKervey, an accounting and consulting firm based in Southfield, Michigan, has expanded its private client services group and augmented its real estate clients by adding Howe & Holscher P.C., a firm in West Bloomfield, Michigan.

Howe & Holscher has offered tax and consulting services to real estate and other closely held business clients for over 30 years. "Growing our firm in strategic areas to better serve our clients has always been a focus for us," said Clayton & McKervey president Rob Dutkiewicz in a statement Monday. "Howe & Holscher's expertise, leaders and clients are a great addition to our growing private client services group. We look forward to expanding our service to high-net-worth individuals through this partnership."

As part of the deal, Howe & Holscher director Lisa Holscher and client service assistant Debbie McDonald will join Clayton & McKervey full-time and co-founder Joyce Howe will provide consulting services. The firm's private client services group is led by shareholder Margaret Amsden.

Financial terms were not disclosed, but Clayton & McKervey is a $19 million firm and Howe & Holscher will represent about 5% of the firm's revenues. Clayton & McKervey has 11 partners. Howe was the single partner at Howe & Holscher.

"We are committed to providing service continuity, outstanding customer service and accessibility to clients," Howe said in a statement.