CBiz has signed a deal to acquire Mahoney Cohen, a New York-based accounting firm that is expected to contribute about $55 million in annual revenue next year.

CBiz, which operates in an alternative practice structure with Mayer Hoffman McCann, ranked eighth on Accounting Today’s 2008 list of the Top 100 Firms, with $500.72 million in annual revenue. Mahoney Cohen ranked 52nd on the list. The deal is expected to close Dec. 31.

Once the deal closes, the non-attest part of Mahoney Cohen is expected to become part of CBiz, and the attest part of the practice will join Mayer Hoffman McCann.

Mahoney Cohen also has offices in Boca Raton and Miami, Fla., but the deal, which immediately establishes a presence for CBiz in New York, should enable the firm to expand both nationally and internationally, according to Allan A. Koltin, CEO of the Chicago consultancy PDI Global Inc., who helped arrange the deal as a principal advisor to both firms.

“It’s a tremendous opportunity for both firms,” he said. “For CBiz, as the eighth-largest accounting firm in the country, it positions them in a significant way in the biggest financial market in the world. For Mahoney Cohen, it puts them on an even bigger playing field, both on a national and international stage. It will provide tremendous opportunities for their people to grow, but also for their clients to grow.”

He believes the deal is also a signal that CBiz plans to return to the acquisition market in a major way. “I wouldn’t be surprised if a couple of other deals are completed in the next year,” said Koltin.

Dave Sibits, president of CBiz Financial Services, said the deal fits very well into CBiz’s acquisition strategy. “As part of our vision and strategic plan, we targeted parts of the country where we didn’t have strength,” he said. “We needed to have a beachhead in those locations. We looked at firms that presented a great opportunity for us as well as for them.”

There will be a transitional period in which both CBiz and Mayer Hoffman McCann will preserve the Mahoney Cohen name in New York while CBiz tries to establish its own name there.

“We recognize that there’s brand value in the Mahoney Cohen name in the New York market that as a brand we don’t have as CBiz,” said Sibits (pictured). “For a time we will go to market with a combination of the names. We have marketing people looking at it to decide what is the best recommended time frame. We don’t want to lose the equity capital they’ve built there, but we want to transition the equity capital to our respective names.”

CBiz and Mayer Hoffman McCann plan to make offers to all of Mahoney Cohen’s approximately 250 employees, but when they join CBiz, they are screened and have to go through a background check.

The employee count includes nearly 30 partners who will become shareholders in Mayer Hoffman McCann. All of the offices will remain open for now, but Bill Hancock, president of Mayer Hoffman McCann, said that his firm plans to eventually combine Mahoney Cohen’s offices in Florida with MHM’s “as soon as is practical to get that accomplished.”

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