Anatomy of a merger
BY DANIEL HOOD
Price Kong & Co. has a plan for pulling in firms
AT A GLANCE
Price Kong & Co. CPAs
Perhaps the most important factor, though,
is that it has established processes, clear
formulas and a strong system, all of which
are clearly on display in the story of how it
merged in Bernard & Stallman.
34 (plus 6 in related financial
services entity and 2 in IT entity)
8 ( 3 equity; 5 non-equity)
Tax management and accounting services; audits; financial
statements; valuations; profit
improvement plans; financial
planning and technology services
(through related companies)
Price Kong & Co. is a firm on the move — but not literally. In fact, the Phoenix-based firm isn’t physically going anywhere,
because it owns the building where its offices are. Instead, it’s pursuing an expansion
strategy that will bring other firms to it, such
as Bernard & Stallman, the two-partner outfit
it merged in at the beginning of August.
“We have an ongoing process where we
seek out other accounting firms that we think
will fit with Price Kong,” said managing partner Sam Winheim.
While Price Kong is also promoting internal growth, a number of factors make expansion through mergers and acquisitions
particularly appropriate. To start, there’s that
building it owns, which isn’t full yet. “We have
adequate space available to expand our firm
significantly without incurring higher overhead,” Winheim noted.
More important, the firm has already had
some experience, and success, in mergers.
“We’ve done mergers twice before, in 1997
and 2002,” he said. “We have found it a viable
and profitable way to grow, in addition to the
organic growth we promote from within.”
A STRONG ADDITION
B&S was founded in 1989 by Gerald Bernard and Gary Stallman — who had worked
together as revenue agents at the Internal
Revenue Service — and offered tax compliance and small-business services to over 600
clients. Stallman is a QuickBooks certified
professional advisor, while Bernard is the coauthor of four books, including a guide to surviving IRS audits for bars and restaurants.
By any measure, it was an attractive M&A
candidate. Still, B&S was not specifically looking to sell — “although we were considering
various exit strategies,” Bernard said — when
the idea of a tie-up arose from a conversation
between Bernard and long-time acquaintance Tony Kong, a senior partner at PK.
Negotiations began shortly afterward, in
March of this year.
For Winheim, the main issues going in
were “the quality of staff and the work they
do, and the client transition to Price Kong.” To
address those concerns, “We reviewed sev-
eral of their files of prior work, knew of their
good reputation, and left it at that,” he said.
MORE TO COME