Three accounting firms based in Jackson, Miss., are combining with CPA firm BKD LLP.
The merger will be effective June 1. The three firms are Smith, Turner & Reeves; Johnson, Bruce & Host; and Shearer, Taylor & Co. Together they bring approximately $10 million in annual revenue and approximately 70 personnel, including 12 partners, to the transaction.
The combination will create the second largest CPA and advisory firm in Jackson and the third largest in Mississippi.
BKD initially approached ST&R about a merger. Allan Koltin, president and CEO of PDI Global, introduced the two firms to each other.
“When we started focusing on Jackson, our initial intention was not to search for three firms to combine with,” said BKD managing partner Neal D. Spencer (pictured). “When we started talking with Smith, Turner & Reeves, the other firms were mentioned as quality firms. We started putting the deal together with Smith, Turner & Reeves, but it made sense to talk with the other two firms. We wanted to put something together that would make a real statement and impact in the state of Mississippi."
His firm currently has a presence in 11 states, including Arkansas, Colorado, Nebraska, Ohio and Texas, and Spencer expects the firm to do more mergers in the future.
"Our firm specializes in providing services to banks and financial institutions," said J. Robert Shearer, managing shareholder at ST&C. "We felt we needed somebody like BKD that had that specialty to help us continue to offer the high-quality service we've been offering to our bank clients."
His firm made $2.3 million in revenue last year. The two partners and 11 staff members at his firm will all be moving over to BKD.
JB&H is about two-and-a-half years old and was formerly the tax practice of KPMG in Jackson, Miss., according to managing member Peder R. Johnson.
"We have been operating as a tax practice," he said. "Many of our clients were from KPMG and some we picked up along the way."
The combination with BKD will allow his firm to provide services such as auditing that his clients had been asking for. "Starting an audit practice from scratch isn't easy to do," said Johnson. His firm services clients in the real estate, healthcare and manufacturing sectors. JB&H was approached by BKD about the merger last fall, and the talks got serious after the beginning of the year.
JB&H had about $2.3 million in revenue last year. Johnson believes the merger will also provide opportunities for the people at his firm. JB&H has 18 people on staff, including four partners. Johnson will be a co-partner in charge at BKD.
“The primary thing at the end of the day is better resources for our clients and better opportunities for our staff to grow,” said Jon Turner, managing partner of ST&R. His firm has a significant healthcare practice at small rural hospitals and nursing homes.
He expects to be able to build on both the healthcare and banking niches by combining forces with BKD. ST&R’s office in Natchez, Miss., is spinning off instead of joining in the merger, but the firm will still be bringing 40 personnel, including six partners, from its offices in Oxford and Jackson to BKD. The part of the firm moving to BKD had $5 million in revenue last year.
“It should be really big for Mississippi business and a great option for kids graduating from our state’s universities,” said Turner. “A lot of kids have moved onto Birmingham and Nashville, and they’ll be able to stay home or come back home.”
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