Marcum LLP plans to merge its China practice with Bernstein & Pinchuk LLP, one of the largest middle-market PCAOB-reviewed auditors in China, to create Marcum Bernstein and Pinchuk LLP.
The merger will create a middle-market accounting firm, inspected by the Public Company Accounting Oversight Board, with significant, on-the-ground resources in China. The merger will take effect Jan. 1, 2011.
As a result of the merger, China-based, middle-market, publicly traded companies, or those undergoing transitions to U.S. stock exchanges, will have access to localized SEC expertise and resources through more than 75 US GAAP and SEC-trained professionals in China.
The firm will have offices in Beijing, Guangzhou, Hangzhou and Hong Kong, with coordinated services throughout the world. The new practice will be headquartered in Beijing. Terms of the deal were not disclosed.
“We’ll be able to do more work in China now than we were able to do before,” said Marcum managing partner Jeffrey Weiner.
Marcum Bernstein and Pinchuk will be one of the few PCAOB-reviewed firms with significant, on-the-ground resources in China outside of the Big Four accounting firms. The PCAOB has been trying to convince more auditing firms in China that work for companies whose stock trades in the U.S. to allow inspections, but so far with mixed success.
Weiner believes the PCAOB will be pleased that it will have entrée to the offices of a familiar U.S. auditing firm. “They know who we are,” said Weiner. “They know the kind of work we do. It’s more an issue with China than with the individual firms. They’d be happy to know another high-quality American firm is doing work there.”
He estimates the combined annual revenue of his firm will be about $250 million after the deal. Marcum ranked 17th on Accounting Today's 2010 list of the Top 100 Firms.
The merger with Bernstein & Pinchuk’s China offices will mark Marcum’s sixth strategic merger in the past 30 months. In October, Marcum LLP merged with Stonefield Josephson, a full-service accounting firm headquartered in Los Angeles, giving the firm offices in Los Angeles, Orange County, San Diego, San Francisco, Silicon Valley and Hong Kong.
Previous mergers have expanded the firm’s offices in the Northeastern U.S., Florida and California. Marcum has more than 1,100 professionals, including 150 partners, in 21 offices throughout New York, New Jersey, Connecticut, Pennsylvania, Florida, Massachusetts, California, Hong Kong and Grand Cayman. The latest deal gives Marcum and its new partners a larger footprint in China.
“We continue to see an increasing trend of Chinese companies that are looking to the U.S. markets to raise capital and are excited to offer our combined solution to the Chinese marketplace,” said Bernstein & Pinchuk co-managing partner Drew Bernstein.
Weiner plans to service Chinese companies that either have securities registered on U.S. exchanges or want to have them registered. They include companies in manufacturing, distribution, technology and other industries.
