Firms Divest, Merge to Find Right Size

Ervin & Co. CPAs P.A., the largest accounting firm in the two-county area, recently divested its Harrison branch and restructured its management to get clients more face time with the firm’s brass.

John Ervin, the firm’s owner, said it was time to “get back to what Ervin & Co. does best.”

“We’ve always been client-oriented,” Ervin said. “But we had a lot of rapid growth, both internally and through acquisitions. As a result, we got more spread out than we should have and it’s back to basics.”

Ervin said he sold the Harrison office to Tom Porterfield, a former accountant for Ranger Boats who wanted to get back into public accounting. Ervin’s Harrison office employed two CPAs, had three other professionals and produced about $240,000 in annual billings.

Ervin wouldn’t disclose a sale price but said the late October deal was fairly sudden.

“We hadn’t advertised the office for sale or anything,” Ervin said. “Tom just called one day and we came to a deal pretty quick. It was good for him and good for me. It allowed us to trim back a little and get refocused.

“I am going to be dealing with clients personally a whole lot more than I have been able to in the past because of our size.”

One of the Harrison CPAs, Robert Ferguson, returned to Fayetteville to become director of audits. He’s been with Ervin & Co. for 11 years. Ruford McCown, a nine-year veteran of the firm, has taken over as director of operations. McCown previously held Ferguson’s spot but will now be responsible for the day-to-day operations of the company.

“We’re reorganizing the whole office and not just the audit department but the tax, bookkeeping and outsourcing sides, too” McCown said. “We’re going to get to where we work a little better with each other and to where we take care of our clients better.”

Ervin said that will enable him to keep one-on-one relationships with clients. That level of service, he said, is going to be required as the industry changes.

Ervin & Co. has about 800 clients, including 40-50 who came with Ferguson from Harrison. Even with the sale, Ervin said, the firm’s annual revenue should only dip from about $1.75 million in 2001 to an estimated $1.7 million for this year.

BKD Merger was Natural Progression

BKD LLP’s merger in June 2001 with Olive & Co. of Indianapolis, Ind., bumped the Top 10 accounting firm from the No. 9 largest in the nation to No. 7.

BKD, based in Springfield, Mo., is the largest accounting firm in the Midwest with offices in 29 cities. It has about 130 employees at Arkansas offices in Fort Smith, Little Rock and Pine Bluff. Its 55 CPAs throughout the state make it the largest accounting firm in Arkansas, and it’s also the largest in Northwest Arkansas with 29 CPAs (See list, Page 21).

BKD, which gained about $80 million in revenue from Olive, had $210.9 million in billings for 2001. But Bill Wessells, a partner with BKD’s Arkansas practice and a certified financial planner, said the firm gained a lot more than just billings from Olive.

“I think the jockeying of firms to find their right size is being driven by the intense regulation that we’re under,” Wessells said. “Olive had expertise in manufacturing and our real specialty has been in health care. We found a lot of synergies to help expand our practices.”

Wessells said BKD is always looking for quality firms to add to tis mix. One unusual merger this year joined two 30-plus CPA firms in the Houston area together under the BKD umbrella