A couple of weeks ago, we mentioned the rumored merger talks of Reznick Group and J.H. Cohn. At the time, both Reznick CEO Ken Baggett and JHC Chief Tom Marino passed on the opportunity to talk to us, which isn't that unusual. As is our wont, we decided to go with the rumor and give you a picture of what the combined Julius Reznick (or whatever) firm would look like. Late last week we heard that the vote was going down and this morning our earlier report was confirmed when the firms announced that they would be consummating their sweet accounting firm love for each other this September.
Reznick Group, P.C., and J.H. Cohn LLP, two of the top-20 ranked accounting, tax and consulting firms in the United States, today announced plans to merge and become the 11th largest firm in the country with more than 2,000 employees, 25 offices and combined revenues of more than $450M.
Hmmm, so if you look at what we wrote earlier, this matches up pretty closely:
Per Accounting Today's most recent ranking, 17th-ranked Cohn and 21st-ranked Reznick would have ~$421 million in revenues combined. That falls short of newly merged CliftonLarsonAllen who claims revenues between $550 million and $560 million and Crowe Horwath who, at last report, had $481 million in revenues for its most recent fiscal year. That would put the combined JH Cohn/Reznick Group somewhere around 11th in size largest firm in the country.
The firm […] would have approximately 250 partners, over 1,200 professionals, and nearly 2,000 total employees.
JHC has 11 offices while Reznick has 10, doubling up only in Los Angeles, which is strange since these are commonly thought of as east coast firms. Cohn's strength in the Tri-state area is a huge boost for Reznick, while JHC would benefit from RG's DC metro presence as well as expose them to the Chicago, Atlanta, Charlotte and Austin markets. Each firm would benefit from expanded exposure in California. They each have an international location – JHC in Georgetown, Grand Cayman and Reznick in Nungambakkam, Chennai.
Just to update a little – JHC has 16 offices per their website and Reznick has 11. We were going by the AT list – which is obviously not updated in real time – and if 25 is the final number, then it's safe to assume there has been an office closure or two, or some planned consolidation.
Mr. Marino and Mr. Baggett are NOW more than happy to talk about the merger (through the release of course):
"The combination of these two great organizations immediately elevates us to a preeminent position on the East Coast with offices from Boston to Atlanta, provides a significant expansion in California, and establishes a national footprint with additional offices in Texas and Chicago," said Thomas J. Marino, Partner and Chief Executive Officer, J.H. Cohn. "This combination of peers changes the landscape of the accounting industry by establishing a firm with an unprecedented concentration of industry experience in real estate, and highly specialized experience in areas such as renewable energy, hospitality, manufacturing and distribution, capital markets, government, construction, life sciences and technology, and valuations.""The synergies and opportunities this merger of equals brings to our clients and staff is nothing short of historic," said Kenneth E. Baggett, CPA, Reznick Group's managing principal and CEO. "J.H. Cohn has very diverse clients across a wide array of industries. When combined with Reznick Group's deep knowledge of the affordable housing and commercial real estate industries, as well as the tax credit arena, the result is a firm that is a powerful resource for clients across all of their accounting, tax and consulting needs."
ANYWAY, there are all sorts intangible details that are boiled down to buzzy buzz words but as you can see, the leaders of the firm see this as a perfect fit. We'll leave it to those in the know to tell us whether they see it the same way.
But perhaps most importantly, the most crucial aspect of this deal that is NOWHERE TO BE FOUND in this press release is the NEW NAME. This indicates to us that leadership is wrestling with this all-important issue. The new name will determine how clients perceive the firm going forward and any missteps could send things spiraling and doom the deal (at least in our minds). We made many fine suggestions in our last post – Cohn Group, RezCohn, JHC Reznick, Julius Reznick, Reznick Julius, RJ Cohn to get things rolling. Our emails to the firms' marketing directors have so far gone unanswered, so until we get something official we'll leave it to you to help them out.
If you've got more insider information on this deal, we'd love to hear it. Email us.
UPDATE, ~2:17 pm:
After catching up on various reports, we've got a bit more information to share on this deal. For starters, Tom Marino told the Baltimore Business Journal that no layoffs would occur because of the merger. That's a pretty important detail. But even more important is that our suspicions of hand wringing about the new name are being confirmed. Accounting Today reports that "The combined firm may be called Cohn Reznick," and Hartford Business says, "the organizations have yet to choose a new name, although J.H. Cohn-Reznic [sic] is a strong candidate. He said both firms' marketing staffs are currently testing the market to see which names fit the brand best."
In other words, your help is needed more than ever.
Also, Mr. Marino made clear to the BBJ that, "We’re not trying to become a Big Four [b]ut we need a bigger market reach and the combination gives us this.”
And one important sidenote is this – what about all the tchotchkes? Rubic cubes, pens, post-its, Nalgene bottles, awful polo shirts. Presumably they get thrown on the heap of predecessor accounting firm swag. Whether that's in the backrooms of thrift stores across the country or some sick hoarder's garage remains unknown.