Accounting Today - October 25, 2010

Sikich: Fearless M&A

BY BILL CARLINO / AURORA, ILL.

Illinois firm follows its merger strategy into new practice areas

AT A GLANCE

firm:

Sikich LLP

headquarters:

Aurora, Ill.

managing partner:

James A. Sikich

no. of partners/staff:

55/350

no. of offices/locations: 10/ Illinois, Indiana, New York, Missouri

Revenue (2009):

$52M

Year founded:

1982

specialty practices:

Accounting & consulting, assurance, business valuations, HR consulting, IT services & products, investment banking, litigation & forensic services, marketing & design services, performance measurement, retirement plan services, tax services, wealth management

In a profession where the traditional definition of quantum change means wearing a striped shirt instead of a solid oxford, CPA and business advisory firm Sikich has, in just over a decade, established a progressive roadmap for multidisciplinary practices.

The Aurora, Ill.-based firm, which in the mid-1990s made a risky but game-chang-ing decision to expand into what were then considered non-traditional services, has morphed into one of the Midwest’s most respected regional practices, with 10 offices in four states, 55 partners and 2009 revenues of $52 million — a 15 percent jump year over year, ranking it No. 57 on Accounting Today’s 2010 Top 100 Firms list.

As a result of its proactive penetration into practice niches such as technology, investment banking, and wealth management, roughly 50 percent of the firm’s revenue currently stems from non-traditional services.

“We didn’t want to strictly rely on one or two services,” remembers firm chief executive officer and managing partner Jim Sikich. “We took a look at the industry at the time and there were the consolidators [Center-

Jim Sikich (left) and Chris Geier

prise, cbiz and American Express] and we
knew we didn’t want to follow that model.
That relied too much on partners selling ad-
ditional services to their clients, and CPAs
aren’t the best salesmen in the world. Tech-
nology was beginning to play a big part in the
industry, and that was something we knew
we should be in.”
Twelve years ago, the firm completed its
first major acquisition in IT — Intelligent
Computer Solutions — the nucleus of what
would eventually become its 80-person IT
consulting and value-added reseller arm,
which reported some $14 million in reve-
nue and took the No. 14 slot in Accounting
Today’s annual VAR 100 rankings. The unit
was, for the fourth time in five years, named
to the Microsoft Dynamics Inner Circle, a
designation bestowed on just 1 percent of
Dynamics partners.

“When you’re a traditional CPA firm, about
80 percent of your business comes back ev-
ery year,” Sikich said. “But when you branch
out, you may be re-inventing 40-50 percent of
your revenue each year. In investment bank-
ing, which is transaction-oriented, you could
go for several months without revenue.”
More recently, the firm has completed a
total of seven mergers in just over one year, a
buying spree that included two IT consultan-
cies, Hal Weinberger Consulting and MAS
Consulting of Chicago; an M&A practice, Levi
Littell Herbst & Co.; and a design firm, Icon
Digital Design & illustration.

A weAlth of nAmes

The roots of the modern firm date back to a one-man shop in 1928 in Champaign, Ill., a practice that eventually became Filbey Summers & Co., where Sikich was eventually made partner. In 1982, several of the senior partners divested their interests, whereupon Sikich and Jerry Gardner remained to form Sikich & Gardner. The firm was later rechristened Sikich & Co. and eventually truncated to its present nomenclature of Sikich.

Last year, the firm formed a number of vertical offerings, including construction, HR and marketing, and filled them with specialists in those disciplines.