Crowe Horwath LLP plans to merge in Perry-Smith LLP on Nov. 1, expanding the Chicago-based firm’s footprint to San Francisco and Sacramento.
As part of the agreement, Perry-Smith’s 16 partners and more than 100 professionals will join Crowe. Crowe Horwath currently has offices in Los Angeles and Costa Mesa, Calif., but the Perry-Smith deal will allow the firm to expand its West Coast presence.
Financial terms of the deal were not disclosed. Crowe Horwath ranked ninth on Accounting Today’s list of the Top 100 Firms with $498.4 million in annual revenue. The merger is expected to bring the firm an additional $30 million in revenue in the new market, according to Crowe Horwath CEO Chuck Allen.
“It was actually a very strategic opportunity for us,” he said in an interview. “It allows us to further develop the West Coast. That’s a key part of our strategy of becoming a national firm that’s globally branded.”
He noted that Crowe already has offices in the southern part of the state, but a presence in Northern California was necessary in order to expand on the West Coast.
“The size of their firm is a great platform for us in a very attractive market,” Allen added. “After we put the two firms together, our business and their business there in Northern California will have approximately $30 million in revenue.”
Allen was in talks with Perry-Smith founder Robert Perry-Smith and his partners for nearly 10 months prior to the merger.
“Being part of Crowe will provide our clients with access to broader resources, while providing significant benefit to our personnel through expanded career opportunities,” Perry-Smith said in a statement.
Allen noted that the two firms have much in common, including a practice serving financial institutions. “Our business is a little more than 30 percent in the financial services industry, and their business is just a little over 30 percent in the financial services area as well,” he said. “This allows us to expand our financial institutions presence, and we’ll be much stronger in that market together than we are apart, in serving banks and financial services organizations in Northern California.”
He noted that Perry-Smith also has approximately 20 public company audit clients, which provided an indication of the capabilities and sophistication of the people at the firm. He plans to invest additional resources in the new San Francisco and Sacramento offices. Several of Crowe’s partners and professionals will be relocating there to offer services in areas such as financial advisory and risk consulting, targeting industries such as food and commodities, and the public sector.
Allen declined to describe the next region where Crowe will be expanding, but he said the firm would be investing more heavily in developing its presence in the New York, Dallas, and especially Atlanta markets. “There isn’t a strategy right now to go to another market,” he said. “The clients and people will take us there when the time is right.”
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