Two Indianapolis area accounting firms are fusing with Ohio-based firms in the coming weeks, deals that participants said are just a sampling of the sizzling merger-and-acquisition activity across the industry.
Carmel-based Blue & Co. LLC is purchasing Cincinnati-based Fleming, Brockschmidt & Durkin, a 15-employee operation that will bolster Blue & Co.'s Midwest presence and bring its total headcount to 362.
And Cincinnati-based Barnes Dennig, which has 135 employees, is acquiring Indianapolis-based Gauthier & Kimmerling, which employs 15. Both deals, the terms of which were not disclosed, will be effective Jan. 1.
"Really across the nation, we're just seeing merger mania among CPA firms," said Blue & Co. Managing Partner Brad Shaw. "A lot of it's because a lot of these smaller firms don't have good succession plans in place and they've got partners that are getting ready to retire."
Barnes Dennig was founded in 1965 and only recently developed its acquisition appetite, opening its first non-Ohio office in Crestview Hills, Kentucky in 2014. It's been eyeing Indianapolis for about 18 months, Managing Partner Steven Hube said, and it struck partly because it's a "thriving metropolis" and because it helps fortify the firm as a regional player.
The cash-and-equity deal will bring on Gauthier & Kimmerling's three principals—Jeff Kimmerling, Kathy Ahearn and Eric Harber—as Barnes Dennig directors. They will remain in Indianapolis.
Hube said he believes mergers and acquisitions have been hot because the world is becoming more complex, and firms are hungry for talent and resources.
"In order to provide the depth of services to meet our middle-market clients, it's all about talent," Hube said. "And the Indiana office provided [several] areas of expertise."
Blue & Co., which was founded in Indianapolis in 1970, has five offices in Indiana, two in Kentucky, two in Ohio and one in Texas.
It made its foray into Cincinnati earlier this year when it acquired Ossege Combs & Mann in a deal that closed July 1. Fleming partners Robert J. Findley, Sandra S. East, Kirk V. Fegley, Emily D. Merkle, and J. Clay Deye, will become partners in Blue & Co., bringing its total number of partners to 47.
Shaw said mergers and acquisitions became a core part of the firm's growth strategy in recent years, and it will undoubtedly continue because the company wants to remain independent.
"We're a large firm, but we're small enough to make quick decisions," Shaw said. "We don't want to be a part of a larger firm because we feel it would stifle our entrepreneurship and slow us down. We like who we are."