By Dave DeWitte
Bergan Paulsen, the Waterloo-based CPA firm, and its technology consultancy, Networking Solutions, rolled out a new brand identity today, reflecting a merger last month with St. Cloud, Minnesota-based KDV.
The merged companies will now be known as BerganKDV, and will create a new top 100 accounting firm with 300 employees in seven Iowa and Minnesota locations, more than $50 million in revenue and 28 partners sharing equity.
The new firm will offer services in five areas: payroll and 401(k) plans, wealth management, technology, planning and consulting, and tax, audits and accounting. It will have offices in Cedar Falls, Cedar Rapids, Coralville, Greater Des Moines, Minneapolis, St. Cloud and Waterloo.
While most of its clients are concentrated in Eastern Iowa and Minnesota, BerganKDV’s technology business serves 450 customers across the United States.
The merger was motivated by the desire to build a stronger team rather than grow revenues, according to Chris Honkomp, who is coming from the Bergan Paulsen side to lead the new company.
“The thing that struck us most was these are people we want on our team,” Mr. Honkomp said. “We just felt like we’d be a better organization if we had these people, and vice versa.”
Scale is becoming more important in the accounting and business consulting field, Mr. Honkomp noted. With the tax and strategy needs of businesses becoming more complex, he said customers are increasingly seeking expert advice in more areas such as tax strategy and planning.
Bergan Paulsen was itself created by a merger of two Waterloo accounting firms in 1986, and had roughly quadrupled its size in the past decade, Mr. Honkomp said. Its clients are mainly businesses, with a heavy concentration of mid-sized, privately held companies.
KDV stands for Kern, DeWenter, Viere, a firm that began in 1945 in St. Cloud, and later expanded into the Minneapolis market. In addition to offering services that overlapped those of Bergan Paulsen, the company brings outsourced payroll services and individual wealth management services to the merger.
In a press release, BerganKDV President Loren Viere, who came from the KDV side, echoed Mr. Honkomp’s remarks about cultural fit.
“We truly believe our firms will offer our clients and employees a better future, together,” Mr. Viere said.
Mr. Honkomp praised KDV’s outsourced payroll software system, saying it competes well with the leading national offerings in the area and will help clients with Affordable Care Act compliance. Wealth management is a crowded field, Mr. Honkomp acknowledged, but adding wealth management services from the KDV side will bring value to BerganKDV clients as baby boomer business owners retire in larger numbers, transfer their businesses and seek the best investment opportunities over the next five to seven years.
The number of employees at both companies was roughly the same, Mr. Honkomp said. He expects the merger to help with recruiting challenges by allowing young college graduates the option of seeking a position in Minneapolis if they want a larger city lifestyle, and by providing the stature of a top 100 firm.
The company’s future is likely to include the opening of offices in northern Iowa and southern Minnesota, which will better enable it to serve businesses in the smaller markets between its existing office locations, Mr. Honkomp said, mentioning Albert Lea, Minnesota and Mason City as possible expansion locations.
Innovation and balance are top goals for BerganKDV, Mr. Honkomp said, as the company seeks better ways to serve clients and balance the needs of all its stakeholders, including customers, employees and their families.
BerganKDV’s management supports employee decision-making close to the operations and customer level, rather than from top-down management, Mr. Honkomp said, citing research that shows lower turnover and more rapid revenue growth at companies with empowered employees. A similar philosophy applies to career development, he said, with employees encouraged to decide where they want their careers to go and to set the pace for reaching that goal.
The name BerganKDV was chosen to preserve the strong brand recognition of the companies that were merged, and to replace the Networking Solutions name, which was easily confused with other companies bearing similar names, according to Amanda Wendling, marketing and business development director with BerganKDV.
The rebranding effort includes a new website and a YouTube video featuring both Mr. Honkomp and Mr. Viere discussing how the merger came about and what it means, including a truce on telling Iowa jokes in the Minnesota offices.
Both companies were seeking growth opportunities through mergers. Bergan Paulsen had been seeking small, targeted merger opportunities within Iowa, but found most of the candidates approached business differently than it did. An industry expert familiar with both companies suggested their leaders meet. Despite low initial expectations, Mr. Honkomp said a recognition of shared goals and cultures grew quickly.
“We’re real excited,” Mr. Honkomp said. “This wasn’t in our vision, but a lot of people have the point of view that if an opportunity comes along, and it looks like a great opportunity, why not take it?”