Last month we broke the news of LarsonAllen and Clifton Gunderson feeling each other out about a possible merger. At the time, Clifton Gunderson CEO Krista McMasters told Going Concern that the two firms were simply in “exploratory discussions” and it wasn’t a story. Sorta like when two celebrities are seen vacationing on a yacht together. Everyone just assumes they’re banging, will eventually be a couple and the new celeb couple name game begins instantly. However, it turns out that they are “just friends” who are “enjoying time together.” For this particular round, our sources told us that LA and CG were “50/50,” that LarsonAllen had approved the merger and that the new merged firm would be known as CliftonLarsonAllen. Again, at the time of our discussion, Ms. McMasters denied that anything had been decided.
Well, today, it appears that the “exploring” went pretty well and the name game was right on the money:
Clifton Gunderson and LarsonAllen have confirmed they plan to merge in the New Year into a combined firm known as CliftonLarsonAllen. The two firms said Tuesday they would combine, effective January 2, to create one of the top 10 accounting firms in the U.S., with combined revenues of between $550 million and $560 million.
Not to nitpick but by Accounting Today’s count, the combined revenues would be closer to $470 million. I haven’t punched a 10-key in a number of years but that’s the number I got. I guess sometimes you just gotta take their word, amiright? ANYWAY, since these two firms were simply in “exploratory discussions” it’s pretty impressive that they were able to slap this deal together so quickly isn’t it?
The two firms began discussions in the spring and made rapid progress. “As often happens in our profession, firms get together to talk about what it might look like if they ever were to come together and how they might help each other,” said LarsonAllen CEO Gordy Viere.
Gosh, I must have a warped idea of what “exploratory” means. And by “spring” I assume that’s the period between late March and late June? And by rapid progress, does that mean, in three months they were still in “exploratory discussions” and nowhere near a deal, only to fall into each other’s arms less than a month later? I need help with this.
It’s been quite awhile since we heard a good merger rumor and this past week we finally heard one that doesn’t involve Moss Adams or Grant Thornton.
Rumor has it Larson Allen and Clifton Gunderson are merging. Vote approved by Larsen Allen, vote pending by CG.
We checked with another source, someone familiar with dealings within the accounting industry, who confirmed that the two firms are talking. According to this person, the combination would make sense as both LA and CG are “sleepy” firms that don’t perform public company audits and have been making small acquisitions here and there. Also it would strengthen CG in areas like Virginia/Maryland where they are rumored to be lowballing engagements and Larson in places like Illinois, Indiana, and Wisconsin where CG has a big presence. This person also said that the deal was “probably 50/50 right now” with the rumored name of the new firm being “CliftonLarsonAllen”.
Clifton Gunderson CEO Krista McMasters told Going Concern that this is “not a story” right now because the firms are simply in “exploratory discussions” and there has not been a vote by the CG partners. Ms. McMasters also denied that there had been any decision on the name of the combined firm, reiterating that they are simply feeling each other out.
Even though it doesn’t sound like things are hot and heavy yet, we rammed a few details together from Accounting Today’s most recent Top 100 Firms list to see what the CliftonLarsonAllen firm would look like:
• A combined $470 million in revenues. That would be good enough to be the 10th largest firm in the U.S.
• 60 offices (probably some consolidation) in 24 states and The District of Columbia.
• Over 300 partners and 3,000 total employees.
A spokesman at LarsonAllen declined to comment but was trying to get someone in the know to call us back. So far, we haven’t heard anything. If you’re in the loop and have more details to share, email us.
BP Completes Cementing Macondo Oil Well From Top [Bloomberg]
“BP Plc completed a cement plug at the top of its Macondo well in the Gulf of Mexico, sealing off the source of millions of gallons of oil spewed into the sea after a drilling rig exploded in April.
The procedure completes the so-called t stage for BP is to finish a relief well to inject cement at the bottom and ensure there’s no leakage inside the 13,000-foot-long (3,962 meters) well bore beneath the seabed, National Incident Commander Thad Allen said yesterday.”
Ten Signs It’s Time to Leave Your Job: The Finance Edition [FINS]
Check yourself for some of these symptoms: “You’ve been holding back from voicing your grievances.”; “You have no clue where the company is headed.”; “You start to believe you can’t do better.”
And that’s just in the first five listed.
Altus completes PricewaterhouseCoopers deal [Bloomberg BusinessWeek]
PwC sells their real estate appraisal management for, what we can only assume to be, a decent chunk of change.
H&R, Jackson Hewitt shares fall on new IRS rule [Reuters]
“Shares of top two U.S. tax preparers H&R Block Inc (HRB.N) and Jackson Hewitt Tax Service Inc (JTX.N) fell Thursday on the Internal Revenue Service’s decision to eliminate debt indicator for tax-refund loans.
On Thursday, the IRS said starting with next year’s tax filing season it will no longer provide tax preparers and associated financial institutions with ‘debt indicator,’ which is used to facilitate refund anticipation loans (RALs).”
Two UHY LLP Partners Recently Named to Prominent Standard-Setting Implementation Groups [Market Wire]
“The national CPA firm of UHY LLP announced today the recent appointment of Houston-based partner Ana Denena to the International Accounting Standards Board’s (IASB) Small and Medium-sized Entities Implementation Group. In a separate appointment, the firm announced that Maryland-based partner Jennine Anderson was named to the Financial Accounting Standards Board’s (FASB) resource group on non-profit entities.”
PCAOB Adopts New Risk Assess. Stds; Issues Release on Failure to Supervise [FEI Financial Reporting Blog]
As we mentioned yesterday, the PCAOB has been busy. Francine McKenna guest-blogged over at FEI and gives the rundown.
Fannie Quarterly Loss Is Smallest Since 2007 [WSJ]
FTW? “Fannie Mae posted a $1.2 billion net loss for the second quarter, the smallest loss in three years, amid signs that the massive wave of souring loans that brought down the mortgage-finance giant may be easing. But Fannie still asked the U.S. government for an additional $1.5 billion.”
District Court Issues Order in Snipes Case [TaxProf Blog]
Just when you thought it was over.
If you’re not getting cloud computing you’re a loser [AccMan]
That is, you’ve got almost nothing to lose by going for it.
Deloitte leadership race reduced to two hopefuls [Accountancy Age]
“he contest to replace John Connolly as leader of Deloitte in the UK will involve just two members of the firm’s board.
The contenders vieing for the top job are Martin Eadon, head of audit, and David Sproul, head of tax. Sproul joined Deloitte when the firm acquired Andersen in the UK on the back of the Enron crisis
Both candidates gave presentations at the firm’s partner conference on 6 July but no further campaigning is expected.”