[Updated below with information about BKD and DHG merger.]
This came through the tipline a little bit ago:
To be announced later today, two top 20 firms will merge and create a new top 10 firm.
Our tipster proceeded to give us a hint that narrowed the field down a bit:
It’s two praxity alliance firms.
The Praxity website has the following accounting firms as members:
- Dixon Hughes Goodman
- Kaufman Rossin
- Mazars USA
- Moss Adams
- Plante Moran
Based on INSIDE Public Accounting’s most recent top 100 list of public accounting firms by revenue, we can take out Aronson, Kaufman Rossin, and Mazars as possible merger candidates, as each of those firms are outside of the top 20. That leaves BKD, DHG, Moss Adams, and Plante Moran.
Because our tipster works at BKD, we’re going to assume that BKD is the firm merging with either DHG, Moss Adams, or Plante Moran. We were told the announcement will be made at 2 p.m. CT today.
The 10th largest firm in the US currently is Crowe, with revenue of $925,856,000, according to IPA’s 2021 ranking of public accounting firms. BKD, the 14th largest firm, had revenue of $758,121,000. If BKD merged with either of Moss Adams (12th), Plante Moran (13th), or DHG (17th), in all three scenarios the combined firm’s revenues would be greater than Crowe’s.
We’ll keep you updated once the merger news breaks.
[UPDATE 1:] While we await the official announcement of which firm BKD is merging with, several sources have told me it is DHG. Will it be called BKDHG? Are they going to go old school and call it Baird, Kurtz, Dobson, Dixon, Hughes & Goodman? What’s going to happen to Ben and Kate? We’ll find out shortly.
[UPDATE 2:] It’s now official (told you so): BKD and DHG are hooking up. But according to a press release from BKD, the new name of the firm won’t be announced until a later date. Here is the full press release:
The leading accounting firms of BKD and DHG today jointly announced they have agreed to merge to create a new, Top-10, national professional services firm with $1.4 billion in revenue, setting the stage for a national growth strategy.
With complementary operations, geographies and nearly two centuries of legacy service between them, the two firms together will operate under a new firm name that will be announced at a later date. The new firm will provide deep industry focus, expanded advisory services, and outstanding career opportunities, building the foundation required for long-term growth and a stronger national presence with a gateway to global expansion. The merger of equals is expected to close in the second quarter of 2022, subject to the satisfaction of customary closing conditions.
Tom Watson, current CEO of BKD, will serve as the CEO of the new organization; and Matt Snow, current CEO of DHG, will serve as the Chair. The two industry leaders said the merger will create a firm that is primed for growth in the current business landscape.
“For years, both BKD and DHG have built strong reputations as high-value, professional client service firms,” said Watson. “We’ve established complementary geographic footprints and strong capabilities in a range of critical service sectors. Together, as one organization, we will deepen our bench strength even further, allowing us to continue to serve our existing client base while also providing the resources necessary to serve an ever-increasing upstream client base.”
Snow added that the strengths of the two companies will help clients better navigate the dynamic commercial landscape.
“I couldn’t be more thrilled to join forces with BKD. The scale of our combined firms, our collective talent and similar cultures will translate to tremendous benefits for our clients and team members,” said Snow. “Both of our firms have an overlapping industry focus in healthcare, financial services and private equity, coupled with other industry sectors where each legacy firm is individually strong. As one organization, we will be able to bring our capabilities to a broader range of clients, providing more innovative, client-centric services to the market.”
The new firm will have a significantly larger national presence, ranked number 8, allowing it to quickly pivot to new market opportunities as they arise and expand its reach. It will have more than 5,400 team members across 68 markets in 27 states, including the United Kingdom and the Cayman Islands. For clients, this brings greater opportunity for more onsite, personalized attention from professionals, regardless of location.
Key merger highlights are as follows.
Strategically Compelling for Both Organizations
- Builds a national firm with $1.4 billion in revenue, uniquely positioned to deliver outstanding opportunities for team members and clients.
- Merges two, well-established firms with strong operating histories spanning nearly 100 years.
- Positions the firm for continued growth, expanding the breadth of services available to each firm’s current client bases while deepening the resources required to serve larger private and Fortune 1000 advisory clients.
- Beneficial for Clients and Team Members
- Broadens geographic reach, placing experienced talent in several key markets to provide onsite services more efficiently.
- Builds scale in key industry areas and client service segments, creating synergies within existing industries and expanding the reach of others to a total of 10 national industry practices.
- Builds new career development opportunities across industry verticals and geographic locations.
- Improves national market recognition, supporting growth of non-audit related services to better serve clients, including those in the Fortune 1000.
- Positions the firm as a destination employer with a people-driven culture.
Feel free to speculate below on what the new BKD/DHG firm’s name will be.