In late June Marks Paneth & Shron, a full-service independent CPA firm based in New York City, announced a merger with two other local firms, Charles Hecht & Company LLP and Gassman Rebhun & Co., P.C. The new firm will retain the name Marks Paneth & Shron LLP and have approximately 270 employees and $37.5 million in annual revenue.
Marks Paneth & Shron was formed earlier this year by the merger of Paneth Haber & Zimmerman and Marks Shron & Company. According to Co-Managing Partner Arnold Gruber, discussions with Gassman Rebhun & Co. began in February, moved quickly, and were finalized in May. According to Gruber, the merger with Gassman Rebhun & Co. brought a sought-after presence in the distribution and freight niche and added to Marks Paneth & Shron’s already strong real estate practice. Discussions with Charles Hecht & Company were initiated and completed in May, with Charles Hecht & Company’s strengths in the health care and professional services niches being a significant factor in the merger, according to Gruber.
According to Joel Sinkin, division manager of mergers and acquisitions at Globalforce International and co-author of “The State of Consolidation of Accounting Firms”, this merger, which creates one of the largest independent CPA firms in the New York City metropolitan area, is no surprise. He notes that many firms of Marks Paneth & Shron’s size are very aware that megafirms can offer more of the services clients want, and merging is one way to either “insulate” themselves or become attractive targets for consolidators.
“My assumption—without knowing all of the facts—is that Marks Paneth & Shron elected to do this so they could offer additional services to retain clients,” Sinkin said.
He added that the two biggest concerns currently facing mid-sized and large independent firms are staffing and how to grow and secure the practice—either through mergers and acquisitions or adding new service areas such as information technology or estates and trusts.
“We’re seeing this trend not only in New York,” Sinkin said. “It is also happening in the Midwest and in Florida.”
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