RSM McGladrey has acquired Philadelphia accounting firm Simonson Lipschutz & Fogel for $6 million.
The deal became effective Nov. 1. Simonson has 35 staff members and was founded in 1990 by partners from a dissolved firm, Laventhol & Horwath. McGladrey's local managing partner, Mike Dubin, had worked at Laventhol in the past, according to the Philadelphia Business Journal.
“We thought we were getting to an awkward size where it was difficult for us to support some of the functions we needed without getting a lot larger, like HR and IT,” Simonson Lipschutz & Fogel president Beryl Simonson told WebCPA. “We spend a lot of time recruiting. For a small firm, it’s a major commitment unless you add major bulk. In terms of our staff, we saw more opportunities for staff to progress and have opportunities at a larger firm. Joining a firm like McGladrey made a lot of sense for us and for our staff.” The firm has $6 million in annual revenue, but Simonson declined to disclose financial details of the transaction with RSM McGladrey.
This is not Bloomington, Minn.-based McGladrey's first foray into the Philadelphia area. The firm acquired Blue Bell, Pa.-based Rudolph Palitz, an 80-person firm, in 2000. RSM is moving its staff from the Blue Bell office into Simonson's office in the Center City neighborhood of Philadelphia.
"They wanted a Philadelphia location to be in downtown Philadelphia," said Simonson. "They’re keeping our office as part of the acquisition."
The Laventhol ties between the two firms helped cement the deal. “We have personal relationships that go back 25 years,” said RSM McGladrey director of business development Nick Araco. “Out in the marketplace, we would refer business to each other and also compete at times. This is an opportunity for us to acquire outstanding talent in one fell swoop. Their client base is heavily concentrated in real estate and construction. We were somewhat light in industry experience prior to this acquisition in the region.”
Discussions about a possible acquisition began several years ago, he noted, but heated up over the past six to nine months.
RSM McGladrey ranked fifth on Accounting Today's 2008 list of the Top 100 Firms, with nearly $1.4 billion in revenue. The firm is a subsidiary of H&R Block and operates independently of sister firm McGladrey & Pullen in an "alternative practice structure."
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