CBIZ has signed a deal to acquire the non-attest business of Thompson Dunavant, expanding the firm’s presence to Memphis, while CBIZ’s affiliated auditing firm, Mayer Hoffman McCann, will acquire Thompson Dunavant’s attest business.
The deal, announced Tuesday, is expected to take effect on August 1. Financial terms of the deal were not disclosed, but Thompson Dunavant posted approximately $15.7 million in revenue during the past 12 months, according to CBIZ. However, CBIZ said the deal is not expected to contribute significantly to its 2011 earnings, but it is anticipated to have an impact next year. For the year ending Dec. 31, 2010, CBIZ’s annual revenue was $590.6 million. CBIZ and Mayer Hoffman McCann, which operate together in an alternative practice structure but are separate legal entities, together ranked 8th on Accounting Today’s 2011 list of the Top 100 Firms.
Up to now, CBIZ has not had much of a presence in Tennessee, aside from a small medical billing practice. Memphis was a priority for the firm's growth plans.
“What we look to be is a major player in the top 20 or 25 marketplaces, and Memphis is somewhere around 17th or so, and to be able to have the most highly respected middle market CPA firm in Memphis really is a coup,” said Dave Sibits, president of the financial services group at CBIZ. The two firms had been in talks for about two years.
Thompson Dunavant was founded in 1997 and provides tax and financial consulting services to clients of all sizes in various industries. TD has 83 associates, under the supervision of managing shareholder Stephen T. Dunavant.
“CBIZ is a growing and dynamic national company with a platform that we believe will provide greater growth for our team and greater support for our clients,” Dunavant said in a statement. “We are excited to join CBIZ because, like us, they have a strong focus on client service and team development. These commitments, coupled with the opportunity to be part of a national company, will provide new growth opportunities for us and enhance our long-term commitment to our clients and our community.”
CBIZ Chairman and CEO Steven T. Gerard said the acquisition would enable his firm to enter the Memphis metropolitan market with the largest locally owned service provider. “They are highly respected in the marketplace and their culture is very similar to ours,” he said in a statement. “This transaction is consistent with our growth strategy of acquiring premier providers to expand our geographic coverage.”
CBIZ may ultimately expand to other parts of Tennessee, according to one source. "For CBIZ, this follows their model of only acquiring 'best in breed' firms and in Thompson Dunavant they pick up one of the top two or three firms in the state," said Allan D. Koltin, CEO of Koltin Consulting Group, who advised TD on the deal. "For Thompson Dunavant, they were ready to play on a bigger stage and will be able to successfully use the additional products and services of CBIZ both in Memphis and ultimately into Nashville and the rest of the state. Their clients will benefit greatly from the combination as will their staff."
Sibits confirmed that the firm plans to continue expanding. “We continue to be focused on pursuing opportunities in the Southeast, but not only the Southeast,” he said. “We’re looking at opportunities where we can broaden our base and become a more effective national firm.”
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