ParenteBeard, a Philadelphia-based accounting firm that employs nearly 1,000 CPAs and staff at offices across Pennsylvania, in the New York area, Baltimore, and Dallas, has been in merger talks with Baker Tilly Virchow Krause LLP, a Chicago firm that employs 1,500, both firms confirmed this morning after I called to ask about staff memos detailing the discussions. The proposal would result in ParenteBeard being merged into the larger firm under the Chicago firm's name and leadership.
"We are currently involved in ongoing discussions with Baker Tilly, and we look forward to providing more detailed information as we advance the discussion and planning process, but we are not in a position to share additional information at this time," said ParenteBeard boss Robert Ciaruffoli, in an emailed reply. Ciaruffoli is the intense Wilkes-Barre native who moved to Center City to lead ParenteBeard's expansion in recent years through a series of mergers sometimes followed by layoffs and partner departures. Small accounting firms have been consolidating into larger firms as the cost of accounting technology and regulatory compliance squeezes practicioners.
"We are involved in ongoing discussions," David Pendery, spokesman for Baker Tilly Virchow Krause, confirmed to me. Both firms are affiliated with Baker Tilly International, a London-based network of more than 100 accounting firms worldwide that competes with the U.S. "Big Four" and other multinational networks. Jake Luskin, the Philadelphia-based North America director for Baker Tilly International, declined further comment beyond what the firms said.
ParenteBeard was the 24th largest U.S. accounting firm, with revenues of $158 million for fiscal 2014, according to the industry periodical Accounting Today. Parente was one of three firms among the top 25 that reported a drop in business from 2013, when it ranked 21st. Baker Tilly Virchow Krause was ranked 17th for 2014, with billings of $301 million.
A memo sent to ParenteBeard staff assures members that there is "minimal overlap" between Baker Tilly Virchow Krause's Midwestern office network and ParenteBeard's "Northeast Corridor" focus. "A larger firm would increase our ability to atract mergers in other markets," the memo adds, and create the biggest firm within the global Baker Tilly network, which reported sales of over $3 billion last year, almost half of that in the U.S.
A separate note from Ciaruffoli to "ParenteBeard Team Members" says the combination would be the 12th largest acounting firm in the U.S., with offices in 28 cities, and directs employees with questions to firm President Jeff Ferro and other senior managers.