Continuing an M&A streak that’s helped it expand across the state, a Roanoke-based accounting firm has grabbed a larger share of the Richmond market.
Brown Edwards this week absorbed Midlothian-based Gregg & Bailey in a deal that closed Jan. 1.
Jason Hartman, CEO of Brown Edwards, said the expansion helps the firm quickly grow in Richmond, where it already had a sizable list of clients, but not much of a full-time physical presence.
“We have a significant client base in Richmond, even though we didn’t have an office,” Hartman said. “When you look at our footprint, Richmond is an obvious place to fill in the gap.”
The firm now has 11 offices, including G&B’s Midlothian office at 15871 City View Drive, next to Westchester Commons. Eight of those 11 are in Virginia.
The G&B deal marks the third time Brown Edwards has grown in the commonwealth via acquisition in the last 18 months. It acquired the Roanoke and Lynchburg operations of Richmond-based peer Cherry Bekaert in mid-2019, and took on the Newport News office of Dixon Hughes Goodman in late 2018.
G&B’s eight employees, including partners Brad Bailey and Beth Llewellyn, are coming over as part of the deal. They’ll be joined by two existing Brown Edwards Richmond employees, and Brown Edwards partner Chris Banta, who had been in the firm’s Roanoke office and is moving to be closer to his Richmond clientele.
The firm also has openings for at least nine Richmond positions.
“We will be increasing the size of that office significantly,” Hartman said.
Discussions with G&B had been ongoing for some time, he said.
“We have had the goal of being in Richmond for several years and talked to several firms. We talked to G&B about five years ago. It wasn’t the right time for them then,” he said. “Since then, Mr. Gregg retired and they were ready to move upstream and be part of a larger firm.”
In addition to gaining an instant physical presence in Richmond, Hartman said the G&B deal also gives the firm a Richmond-based tax practice, which it didn’t have previously.
“A lot of our Richmond work is audit work,” he said.
G&B’s book of business produced around $1.2 million in annual revenue last year, Hartman said. Brown Edwards is at $58 million in revenue annually.
The firm has doubled its revenue since 2015, and Hartman expects to stay in growth mode. That will be driven in part by an aging trend within the industry.
“There are a huge number of mergers with CPA firms happening every year, a lot driven by the demographics of the profession,” Hartman said. “There are a lot of baby boomer partners beginning to approach retirement age. They don’t have good succession plans or people ready to step into their role behind them. The experts seem to think that’s going to continue.”