Indiana-based municipal advisor Umbaugh and Associates, LLP and Minnesota-based Springsted, Inc. are being acquired by Chicago-based Baker Tilly Virchow Krause, LLP in a move that positions the combined firms to become a top 10 municipal advisor.
Baker Tilly is a public accounting and consulting firm that doesn’t currently offer municipal advisory services, although it is registered to do so. It is the largest of the three firms with 45 offices and 3,000 employees.
Springsted and Umbaugh were ranked 22 and 23, respectively among municipal advisors in 2018, credited by Thomson Reuters with volumes totaling $2.5 billion and $2.2 billion.
The combined volume of $4.7 billion would have placed them in the top 10.
“The rankings are going to go up clearly,” Springsted President Kathleen Aho said. “If you look at 2017 numbers our combination of sales would put us in the top 10 long term for fixed rate for both volume and sales. It’s not all about being big, we want to be best, and now we have an opportunity to be both.”
Vicki Hellenbrand, Baker Tilly partner and public sector practice leader, said that the combination of the three firms is expected to be effective in first quarter of this year.
Umbaugh and Springsted will be part of Baker Tilly’s public sector practice led by Hellenbrand.
Umbaugh and Springsted leadership are joining Baker Tilly and decisions and day-to-day management will remain local.
Baker Tilly's long-established public sector group is a team of 220 professionals serving nearly 1,000 government clients. It provides audit and advisory services to the public sector, including financial forecasting, tax-increment finance projections, consolidations and shared services, forensics and expert witness services, enterprise resource planning, process and efficiency analysis, and internal controls reviews and recommendations.
The combined firms will rebrand as Baker Tilly following a transition period of nine to 12 months.
Hellenbrand said the three firms chose each other because of their strengths and respective leadership.
"We really are coming together; we want to co-create, truly take the best ideas and practices and build something even greater together," said Hellenbrand.
"In this case, the opportunity is even more special where Springsted and Umbaugh and Baker Tilly are doing something that hasn’t been done before," she said.
“The combination of these three firms just offered great advantages to our clients and also to our staff in terms of the resources that we have available,” Springsted President Kathleen Aho said. “The access to expand the talent and expertise within these three firms really creates a powerhouse that is kind of like a candy store, shopping for the technical expertise that you need in any of the areas that we have to be good at in order to serve our clients well.”
Umbaugh focuses solely on financial management, capital planning, bond issuance and post-issuance advising and consulting for municipalities, utilities, schools, libraries, counties and townships. The firm has four Midwest offices in Indianapolis; Mishawaka, Indiana; Columbus, Ohio; and Lansing, Michigan. The firm has 120 team members.
Springsted’s public finance services include municipal finance and post-issuance compliance, operational finance, investment and housing and economic development services. The firm also specializes in providing human capital services for public and non-profit organizations. The firm is headquartered in St. Paul, Minnesota, and has offices in Atlanta; Chicago; Dallas; Denver; Kansas City, Missouri; Milwaukee and Richmond, Virginia. The firm has 68 team members.
“In the last decade Baker Tilly has seen clients’ needs evolving requiring more sophisticated services and some of those services were best provided by partnering with strong firms that have a background in the municipal advisory space,” Hellenbrand said. “We saw that aside from services Baker Tilly already offered in the public sector, one large missing piece was the ability to do municipal advising. The firm is registered to be a municipal advisor but in order to bring these services to the marketplace as quickly as we felt our clients needed them, partnering with the firms was the best approach.”
Aho said that combining the firms will allow them to more efficiently tackle the increased regulation of municipal advisory businesses. “To be able to do that efficiently across three firms instead of individually across three firms is really a big deal,” she said.
Umbaugh Executive Partner Todd Samuelson said the firm has seen challenges and opportunities in the market driven by the regulatory environment.
“Our clients continue to be challenged to do more with less and I don’t think that is unique to our existing footprint of Indiana, Michigan and Ohio,” Samuelson said. “We wanted to continue to position ourselves in this combination to expand our footprint and be able to provide the services we have provided for years, in addition to what Springsted and Baker Tilly professionals bring to the table. We think it’s a great long-term play for the firm, for our clients and the people that we have here at Umbaugh.”
Umbaugh’s perspective comes from a period of significant growth that Samuelson expects will continue. That high level of growth over the past few years has challenged the firm’s platform in terms of support systems for staff recruitment, staff development, staff training and areas of technology and investments in data, he said.
“Combining the firms allows us to tap into a platform opportunity that is further down the road and more advanced than [what we offer]," Samuelson said. “We can get there but it would take us more time and investment to. Combining the firms allows our partners, principals, directors and professional staff to focus more on client needs and client services as opposed to platform needs.”
Aho said that combining the firms allows Springsted to gain expertise in areas the firm had not yet fully developed such as higher education.
Samuelson that combining their expertise will create not only a bigger firm but a better firm.
“Having a firm that has a fully developed power of services and going back to challenges and opportunities in the market that we see today -- whether its infrastructure or economic development, public schools -- these sectors are all doing more with less and our mission is what we can do to make the quality of life in those communities better," he said. "That is a role we take very seriously.”
