In a union that would create one of the largest CPA and business advisory firms in California, Top 100 Firm Burr Pilger Mayer is merging with Windes & McClaughry Accountancy Corp., effective Jan. 1, 2012.
The combined entity will have roughly $100 million in revenue, 73 shareholders, 550 employees and 11 offices throughout Northern and Southern California.
Going forward, the merged firm will be known as BPM in Northern California and BPM Windes in Southern California.
BPM managing partner Steve Mayer will serve as the firm's chief executive and managing partner. Windes managing partner John Di Carlo will oversee the operations of BPM Windes.
"I honestly think that this clearly is the most substantial merger in the history of California," Mayer told Accounting Today. "About a year and a half ago we had an epiphany after reading about yet one more merger with East Coast or Midwestern firms getting into California. So I got a list of the top 20 firms and took a look at who's out here and who’s not. Strategically, we thought we could duplicate what we've done in San Francisco, where we wanted to own the Bay Area and now have six offices there, where all are full-service and deeply involved in the community."
San Francisco-based BPM ranked No. 44 on Accounting Today's 2011 Top 100 Firms roster with revenues of $64.38 million. Meanwhile, Long Beach-based Windes reported 2010 revenues of $23.4 million.
"Our cultures and the way we operated were almost identical," said Windes managing partner John Di Carlo. "That was a great starting point. If you don't have that, there's no sense going on. We'll focus on growing the marketplaces we're in and then expand the footprint to areas where we can effectively serve clients well. We want to get into some areas they do well such as litigation support, valuation and wealth management. Geographically, we need to get bigger in metropolitan Los Angeles."
Mayer explained that the firm conducted a trio of partner meetings for brainstorming and data gathering on the Southern California market. After the third meeting, Mayer said they felt they understood the region.
"We wanted a firm with at least $25 million, two offices and an SEC practice because we know we could expand that,” he explained. “We began talking to Windes about a year ago, and the more John and I talked, the more we liked each other."
In addition to the SEC niche, both BPM and Windes have established practices in audit, state and local tax, and high-net-worth individuals, among others.
"For BPM, it puts them on the map in Southern California in a really big way, and for Windes it gives them additional resources and services to double their size in Southern California," said Allan Koltin, CEO of Koltin Consulting Group, who served as principal advisor on the deal. "Up until now, the big mergers of CPA firms in California have been driven by East Coast firms coming into the market. It was just a matter of time until two prominent California firms would say, ‘Now it's our turn!’"
"In San Francisco we thought it out and had the right [growth] strategy," said Mayer. "We plan to grow it [BPM Windes] to $50 million over the next three years and can add another $25 million in San Francisco to make it a $140-150 million firm. There's a lot of possibilities, San Diego, Orange County, Downtown and West Los Angeles. This will be a great launching pad."
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