The Bonadio Group, upstate New York’s largest independent CPA firm, has agreed to merge with Gaines Kriner Elliott LLP (GKE), Buffalo’s 11th-largest accounting firm.
The combined business will now be Buffalo’s second-largest independent accounting firm, Thomas F. Bonadio, CEO and managing partner of the Bonadio Group, says. The merger is also the largest one the Bonadio Group has ever done, and the firm has completed about a dozen deals in the last decade, he adds.
Rochester–based Bonadio Group — which has Central New York offices in Syracuse, Geneva, and Utica — says it will legally finalize its deal with Gaines Kriner Elliott on Nov. 1, and GKE will operate under the Bonadio name.
The merger will add 88 employees — including eight partners and workers at two subsidiary companies — to the Bonadio Group in Western New York. That will give Bonadio a total of 130 employees in the region, which includes offices in Amherst, Batavia, and East Aurora. The Bonadio Group, which has had a Buffalo–area presence since 2001, currently has an office in Williamsville.
The merger is expected to add nearly $10 million to Bonadio’s revenue, which would bring its total annual revenue to about $70 million, the firm says.
The deal has been in the works for about three years since Tom Bonadio and Rocco Surace, managing partner of Gaines Kriner Elliott, first discussed the idea.
“We’ve been dating for three years. We’ve vetted each other well and made sure our cultures are the same,” Bonadio says. “Their clients are closely held businesses but the industries are diverse. We bring industries they don’t have experience in such as hospitals, universities, and a very deep construction practice. We have products they can sell to their current clients. There’s going to be a lot of cross-selling back and forth.”
In 2014, employees at the Bonadio Group’s Williamsville office and GKE’s Amherst office will combine at a single location, which has yet to be identified, the companies say.
Philip Mann, CPA will serve as office managing partner of Bonadio’s new combined Buffalo presence.
Two GKE subsidiaries that will join the Bonadio Group in the merger are GEMKO Information Group, a reseller of computer servers and other information-technology equipment, and Athena, a provider of sales-lead generation services for companies such as manufacturing firms.
Future merger plans
The Bonadio Group, which has used acquisitions to fuel much of its growth, will take some time to digest this deal because of its size, Tom Bonadio says.
But then the firm will turn its attention to the Syracuse and Albany markets to seek deals that could get the Bonadio Group above the 100-employee mark in each area, he says. The firm currently has about 45 employees in Syracuse and 75 in Albany.
“Our goal is to be over 100 people in every market we’re in,” Bonadio says. “At 100 employees, you can specialize and you get a shot at [most customers in a market,]” he adds.
Bonadio says he expects no shortage of merger opportunities as the CPA industry is at just the start of what could be a prolonged period of “merger mania.” He says the industry is oversupplied with CPA firms for the growth level of the economy and many CPA firms have aging leadership teams that are looking to exit. Also, the increasing complexity of accounting means “you can no longer be a master of everything,” Bonadio says. So, firms need to specialize, and mergers are a way to do it, he adds.
The Bonadio Group’s Syracuse office is located at 115 Solar St. and includes six partners.
The firm first entered the Syracuse market in 2007 with the acquisition of Loguidice & Kamide, CPAs PLLC. Bonadio acquired the Syracuse operations of Philadelphia–based ParenteBeard in 2011, which added 21 employees and four new partners.
Now in its 35th year of business, the Bonadio Group offers accounting, business advisory, payroll, and personal financial services to clients of all sizes. Bonadio is a nationally ranked Top 100 CPA firm. It has offices in Rochester, Buffalo, Syracuse, Albany, Geneva, Perry, Utica, New York City, and Rutland, Vt.
Contact Rombel at arombel@cnybj.com