Bonadio & Co. LLP, the largest CPA firm in the Rochester market, will become one of the biggest in the Buffalo area on completion of its merger with Gaines Kriner Elliott LLP.
Gaines Kriner Elliott, with 88 employees, is the 11th-largest accounting firm in Buffalo. The transaction is scheduled to close Nov. 1, with GKE taking the Bonadio name and increasing Bonadio's workforce in Buffalo to 130.
Bonadio will be the second-largest accounting firm in Buffalo, behind only Freed Maxick CPAs P.C., said Thomas Bonadio, CEO and managing partner of the Perinton-based company, which does business as the Bonadio Group.
"It's a big one for us," he said. "It's the largest merger in our history. It's going to shake up the Buffalo market."
Bonadio Group employs 380 people at nine offices in New York and a satellite office in Vermont. It is the largest independent accounting firm in Upstate New York.
It has 81 certified public accountants locally and total local employment of 192.
Bonadio Group entered the Buffalo market in 2001 by merging with current subsidiary MS Consultants LLC and its 13 employees. Bonadio Group now has 40 to 50 workers, including four partners, at its office in Williamsville, Erie County.
"Our strategic plan is always to find good firms to merge with, and it always is to be No. 1 or No. 2 in every market we're in," Bonadio said. "This will make us No. 2, we believe, in the Buffalo market," ranked by size.
The firm has been negotiating with Gaines Kriner Elliott for more than three years, Bonadio said.
"Most of them, for us, take a while, anywhere from a year to two," he said. "It's like dating. You never know when the right time is to get engaged, when the right time is to get married. It's when everybody is ready. Sometimes things have to fall into place.
"They're a good firm. They didn't have to do this, and we didn't have to do it. We're doing it because it's a good answer for everybody."
With headquarters in Amherst, GKE also has an office in East Aurora and another in Batavia, Genesee County, after joining forces with John J. Forsythe CPA P.C. in February.
"They're a high-quality firm in Buffalo, 80 to 90 people all together with their subsidiaries," Bonadio said of the 90-year-old company.
"They have great, old-line Buffalo clientele. Their eight partners were born and raised in Western New York. They have the connections and relationships that you can only get from living in a community your whole life."
Philip Mann, an executive at MS Consultants, is the partner in charge of the Williamsville office and will be managing partner of the merged operations. The location of the office has not yet been determined.
"Their clients will be able to not only get the same people they've had working with them for years; they now will get all the other services that our firm can provide," Bonadio said.
"Their people are going to get great opportunities to grow that they might not have had, and we're going to get 80 to 90 additional people on the ground, with a great client base. There are the obvious cost synergies when you put two groups together. But I think the revenue synergies here are exceptional."
The Bonadio Group will benefit from several services offered by GKE, including its U.S.-Canadian business consulting and tax services.
"We have very little Canadian cross-border tax work," Bonadio said. "They have developed a program for doing that. They work with CPAs and lawyers and other professionals in Canada who need American tax returns filed.
"We think there are exceptional amounts of Canadian cross-border work. With our connections and our resources, and they're already in the market, we'll be able to grow that business substantially over the next few years."
Two GKE subsidiaries are included in the merger: the Gemko Information Group Inc. and Athena SWC LLC.
Founded in 1990, Gemko resells computer servers and other information technology equipment. Athena provides sales leads for companies such as manufacturers.
GKE and Bonadio share the values and business philosophies that breed success, GKE managing partner Rocco Surace said in a statement. The firms complement each other, and the combined strengths and expertise will benefit both companies, he said.
The merger is expected to add nearly $10 million in annual revenue to the Bonadio Group, for a total of $70 million, company representatives said.
"They know everybody there is to know in the community, but they've only sold what they have," Bonadio said of GKE. "Now they have 50 more products they can sell. It's like giving them a whole new set of golf clubs. They have more clubs in the bag than they've ever had before."
The merger surpasses Bonadio's previous largest, with DR Group LLC in 2008 to give the firm a foothold in the Albany market. That merger added 77 employees, including six partners and 21 CPAs.
"One of the reasons we do this is because we're looking for talent," Bonadio said. "We want to keep all the people happy. We're hoping that all of them are going to be very happy. We're not doing this to reduce head count. We're doing this to grow top line."
Many CPA firms are looking at merger possibilities because they do not have funded retirement programs for baby boomer employees who have begun thinking about retiring, Bonadio said.
"We are getting calls from CPA firms of pretty much all sizes on a consistent basis," he said. "They don't have funded retirement programs, for the most part. We do. They don't have a succession plan. We do. So they're kind of in a quandary of how to compete in a market where they don't have all the resources.
"It's not just happening in Upstate New York; it's pretty much all over the country. It's merger mania out there. We're in a unique position. We have lots of them inquiring. Our job is to make sure the culture is right, pick the best ones and do them across the state."
Bonadio is not looking at another merger anytime soon.
"This one is a big one, so it's going to take us a while to digest it," he said. "We won't tax our people too much in the near future because we're going to have a lot of integration work here."
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