Plante Moran and Blackman Kallick, two of Chicago’s biggest accounting firms, will merge effective July 1, 2012.
Together, the two firms employ 2,000 staff members in 22 offices in Illinois, Michigan and Ohio, and three offices internationally. Combined revenue for the firms in 2011 was approximately $375 million. Plante Moran, based in Southfield, Mich., ranked 12th on Accounting Today's 2012 list of the Top 100 Firms, while Blackman Kallick, based in Chicago, ranked 57th.
The combined firm will have three Chicago-area offices serving more than 5,000 clients, primarily in the manufacturing, real estate and construction, financial institutions, private equity and venture capital, not-for-profit, services and technology industries. In addition, the firm has offices in Shanghai, China; Monterrey, Mexico; and Mumbai, India.
The combined firm will be known as Plante Moran in about six months. Until then, both firm names will be used in the combination with a special co-branded logo.
“From our perspective, the compelling factors were the suite of services they [Plante Moran] offer in the consulting area, especially manufacturing, which is our largest area of concentration,” said Blackman Kallick managing partner Steven Schneider, who will oversee the newly joined offices in downtown Chicago. “Many of these services we had to refer outside the firm. We have been looking at building these services out and decided that synergistically we could plug right into what Plante Moran has to offer.”
“It’s a great thing for the Chicago market, both for our clients and our staff,” said Plante Moran managing partner Gordon Krater. “We can grow faster together than apart. They were our best competitor.”
Two other areas of synergy the merger offers are in private equity practice and not-for-profit areas. “Our focus is on social service agencies and trade associations, while Plante has a big presence in higher education,” Schneider noted.
“Our vision is to be the major firm serving the major market in the middle of the country,” said Krater. “We would grow 9 or 10 percent this year without the merger. This is about two strong firms that combined will grow faster together. The compelling case for the merger is not out of need, but out of strength.”
“Middle-market companies are a leading indicator of America’s future competitiveness,” Krater added. “Middle-market companies today require a higher level of sophistication and expertise in dealing with the complex issues they face as they expand globally, meet new competitors, grapple with financing alternatives, and plan for succession. Our combination establishes us as a top resource in Chicago focused on this vital middle-market segment.”
As part of its commitment to the community, the firm will promote Champions of Charity, a contest using social media to vote for a favorite local charity, kicking off on July 9, 2012. Based on the results, “we’ll be giving $25,000 to a local charity,” said Krater. “It gives us exposure and provides a way for us to give back to the community.”
The fit between the two firms couldn’t be better, according to Koltin Consulting Group, Inc. CEO Allan D. Koltin, who has consulted for both firms over the past decade. “Blackman Kallick overnight gets much more bandwidth, more industry expertise, and new products and services,” he said. “I really believe it gives them the arsenal to take revenue from $50 million to $100 million over the next five to seven years, by virtue of the deeper industry niches. For Plante Moran, this puts them on the map in a big way. They become the seventh largest CPA firm in Chicago.”
Blackman Kallick, as the largest independent CPA firm in Chicago, was in great demand as a merger candidate from other firms, observed Koltin. “Up till now, Blackman Kallick said ‘no’ to everyone,” he said.
Two things made the merger with Plante Moran desirable, Koltin indicated. “First, there is an access to product and service mix and a deeper industry niche that Blackman didn’t already have,” he said. “Second, Blackman is deeply committed to their people, and felt the culture of how Plante Moran treats its people would be a great fit. The partners wanted to make sure it would not only be a fit for their clients, but for their people. They probably could not have found a better culture of how to treat people than Plante Moran. If the late Dan Fensin, the former managing partner of Blackman Kallick, were looking down, he would have a big smile on his face, because Plante Moran was always a firm he admired and wanted to be like.”
