The Clifton-based accounting firm Sax, Macy, Fromm & Co. announced this morning it will merge with Bollam, Sheedy, Torani & Co., of Albany, N.Y., to create SaxBST, whose combined annual billings of $45 million will rank among the top 100 CPA firm nationally. The goal is to grow to $60 million in five years.
The merger is to become effective Jan. 1.
Robert Paz, managing partner of Sax Macy, said the combination — a merger of equals and not a financial transaction — strengthens Sax Macy's presence in the New York and Long Island markets.
Sax Macy already has a strong client base in New York, and with the merger will gain an office in the city.
Sax Macy has 18 partners and 120 people, while the merged firm will have 48 partners and 220 people. Paz said the two firms were about equal in revenue.
Paz said New York is a growing market for the company, "and it helps us strategically to have a presence there, to attract new business, because New York firms do want to do business with New York firms. So this gives us now a new platform to grow that practice."
Paz said right now, BST's New York office has about 20 people. That will be expanded to 25 at the start, "and from there, we'll see," he said. "It depends on what our needs are."
In terms of revenue, New York right now accounts for about a third of SMF's practice, Paz said.
Paz said the two firms' "core cultures match up so well and the practice areas that they have augment ours very well, and vice versa." BST, for instance, has a significant valuation, forensic and litigation practice, while Sax Macy's "focus on the construction industry, real estate, health care, not for profit is going to augment their practice in Albany and New York City."
Paz said the Albany firm also has a governmental practice the Sax Macy does not. That will help the combined firm pursue governmental work in New Jersey.
He said the Albany firm serves union clients, and that connects well with the construction practice in Clifton.
While New York is a very competitive market, "construction is an area where we have had tremendous success in New York," Paz said. "And there is a tremendous construction boom going on now. We are finding more New Jersey construction firms finding work in the city. Another area that is a huge, huge opportunity for us is real estate. The real estate market in New York is so rich, and we have a tremendous amount of talent in our real estate area. So I think we can really make a difference in that market."
But that opportunity won't come at a cost to New Jersey, Paz said, noting Sax Macy recently hired 15 people for its Clifton operation,
"We will be looking to continue to expand our New Jersey presence," he said.
Stephen Ferraro, BST managing partner, said his firm's governmental and municipality audit practice is an additional strength that Sax Macy will gain.
"We audit several municipalities throughout New York state and Long Island, and we also audit municipal electric utilities," he said.
He said there are 48 municipal electric utilities in New York state, and his firm provides auditing and consulting services to 40 ofthem.
"We have an expertise in governmental accounting, which is kind of unique, and we'll be able to leverage that expertise in the New Jersey marketplace."
Also, he said BST has "a valuation forensic litigation support group that is very, very strong and well regarded throughout the Northeast," accounting for about 25 percent of the firm's business. He said Sax Macy has a valuation/litigation support group "but not to the degree of ours, so those are resources we can deploy in the New Jersey market quite effectively."
The merged firm will also maintain its office in Mineola, N.Y.