A Sleeping Giant Awakens As UHY Advisors Merges In Boston's Brown & Brown With The Lure Of Deep...

It was late in 2005: Carl F. Jenkins, managing partner of Boston-based Brown & Brown, faced what he describes as a "perfect storm of issues" in the path of his firm. Succession planning was a concern. The firm also had a long-term lease commitment coming to an end.

Of greatest concern, however,

was that B&B had recently lost proposals not because the prospective client was unimpressed with the firm, but because B&B lacked essential resources to win the engagement. Example: The client wanted a firm with a Los Angeles office, or one in India. Jenkins - who at age 50 had been with B&B for 10 years and MP for the last five - saw the larger implications of these losses.

"We were growing, but we realized it was going to be a continuing challenge to grow," he explains.

After a thorough evaluation and search process, B&B is merging with Chicago-based UHY Advisors effective July 1. B&B, with 11 partners, 105 total staff and two offices, posted $12.5 million in net revenue in FY05. The firm was on pace for $15 million ha net revenue in FY06.

UHY Advisors (www.uhyadvisors-us.com) had $196.8 million in net revenue in FY05, up from $174.1 million in FY04. With 22 offices, 105 partners and 1,285 total staff, the firm projects 15.7% growth in FY06, to more than $227 million.

It's the first merger for UHY, previously known as Centerprise Advisors, since the firm reorganized and recast its brand in fall 2004. (Centerprise had no significant mergers after forming in 2000.)

Jenkins was skeptical when he realized that B&B needed to consider a merger. It wasn't his first choice: He feared losing autonomy and jeopardizing B&B's well-established reputation in Boston. He also knew that for a merger to succeed, the parties would need compatible cultures, shared strategic vision and complimentary strengths and weaknesses in practice areas and resources. (See related story, p. 12.)

The firm engaged consultant Stephen Weinstein, based in Stony Creek, Conn., and launched an initiative in January. The firm created two teams, one to evaluate internal growth opportunities, the other to investigate merger options. After deciding to pursue a merger with a national firm, B&B set itself a June 30 deadline to find a partner and close the deal.

Enter UHY, which, ironically, beat B&B on two of those aforementioned proposals. The pair met each other's merger needs for several reasons: UHY had only a small Boston office. B&B's industry strengths (including high-tech, biotech, financial services) didn't overlap with UHY's (construction, energy, nonprofit, litigation support). UHY offered marketing clout and a national training program based in Lake Charles, Ill., designed to standardize audit and tax processes.

The emphasis on standardization emerged from the 2004 restructuring that coincided with the name change to UHY from Centerprise. UHY had endured its share of challenges after forming in July 2000 with the roll-up of Follmer Rudzewicz & Co. of Southfield, Mich.; Grace & Co. of St. Louis; Mann Frankfort Stein & Lipp of Houston; Scillia, Dowling, Natarelli & Co. of New Haven, Conn.; and Urbach, Kahn & Werlin of Albany, N.Y.

Centerprise was staggered when founder Bob Hasten stepped down in August 2002 after being diagnosed with amyotrophic lateral sclerosis (ALS, or Lou Gehrig's disease). Basten, now largely debilitated by the disease, remains a member of the UHY board. "Our will to succeed came from Bob," Samek says. "He left an indelible mark on the firm."

Centerprise also suffered an identity crisis as each of the founding firms maintained its own individually named LLP. "We were trying to operate as one firm, but we were not perceived as that," Samek says. "At a firm meeting, you could see business cards with as many as five different business names. We needed to have a brand that was universal, that we could build around," Samek says.

Under the UHY practice model, attest services are performed by UHY LLP (except in Texas, where they are performed by UHY Mann Frankfort Stein & Lipp). The UHY brand also extends to the firm's international association, Urbach Hacker Young International (www.uhy.com).

With the restructuring came a commitment to universal processes within the firm, not just in marketing but also in staff training, client acceptance and audit.

Jenkins anticipates the benefits of those processes as B&B joins UHY. B&B staffers were attending UHY training sessions in St. Charles in early summer, before the merger was official.

In fact, while merger parties often tout their new arrangement with hollow catchphrases ("synergy," "seamless integration," and "win-win"), Jenkins exhibits unbridled enthusiasm. "I haven't been this excited in my career since I first went to BCPMG in 1978 right out of school, and I'm hoping many of us feel that way in the firm."