Anatomy Of A Merger: How A Boston Firm Went Upstream To Make A Deal On Its Own Timetable And Its...

When Carl Jenkins and his partners decided it was time to merge his firm, Boston's Brown & Brown, he knew that he had to find the right partner, the right culture and have the right people on board. He also knew that such goals are easier said than done.

Merger discussions at B&B began

(1) A common "vision," including strategic and tactical objectives;

(2) Complementary industry and service lines; and

(3) Geographic compatibility, in that B&B would bring the stronger Boston market presence to the merger.

B&B's search brought it to UHY, Jenkins explains, but that was only the beginning.

"We provide advice to our clients in M&A," Jenkins says, "but there's a big difference between advising them and being in the middle of your own merger."

For one thing, a merger - not unlike selling a house - requires you to "fix every issue you have at a date certain," Jenkins says, including staffing, communication and client issues.

Meanwhile, your firm must perform due diligence required in a merger while preventing staff from becoming aware of the prospective deal.

"We kept it under wraps," Jenkins says. "We didn't want the community to know, didn't want staff to know, didn't want headhunters going after our staff, didn't want staff leaving until they had the whole story."

The firm's controller had to be aware of the deal for due diligence reasons, but only five of the firm's 11 partners knew of the merger plans in advance.

When it came time to announce the deal, Jenkins says, "We brought the partners in one by one, explained it as best we could, and immediately brought in a team from UHY to meet with them over a two-day period, to get questions answered."

In keeping with a plan to tell everyone the news within a one-week period, B&B then called a firmwide meeting with only three days notice to break the news to the entire staff. The meeting took place in the function room at a hotel and featured a slide show and presentation. It included an introduction to UHY leadership, who spoke to staff. The evening concluded with a cocktail reception.

The real work began the next day, Jenkins says. At any firm, the typical staff member's reaction to a merger is to fear for one's own job. At B&B, the firm's leadership emphasized that no one's job was at risk. In fact, the office actually planned to hire two new people, net, per month.

"We've been trying to Over-communicate,' if there is such a thing," Jenkins says.

Other staff concerns related to changes in compensation and benefits. The challenge, Jenkins notes, is to get staff members to focus on the opportunities that the merger presents, not just on the changes.

"As accountants, spontaneity is not our strength. Being able to change is a lot of work," Jenkins says.

That the changes are taking hold is evidenced by the fact that B&B staffers were already attending UHY national training sessions prior to the merger becoming official.

' It's also evident in Jenkins' enthusiasm: "The merger is effective July 1, and I feel like I've known these [UHY] people for years already."