Who: SS&G and BDO USA

What: Merged in 2015

Why it matters: SS&G partners caught a new growth wave, while BDO USA gained a valuable Ohio presence

SS&G was the fastest-growing accounting firm over the last 30 years, recalls co-founder Mark Goldfarb. “Nobody was even remotely close to us.”

In another era, Goldfarb and his senior partners might have ridden that wave to the end of their careers, selling their shares to younger partners and retiring.

But Goldfarb saw a golden opportunity to give himself and his partners a chance to tap into an even bigger growth wave: the private equity boom.

“I can see a lot of people saying, ‘This is our baby, we can’t sell it,’” Goldfarb says. “If you live in that mindset, it’s just not the world we live in today.”

As Goldfarb saw it, the world SS&G and other regional accounting firms competed in is heavily impacted by private equity.

“Being an accounting firm that is highly credentialed in the private equity world was something that we thought was very important,” he says. “Being larger and having more resources gives you the ability to attract, retain and recruit employees. That’s our lifeblood.”

SS&G had plenty of opportunities to sell or merge, including a 2001 overture from BDO USA LLP. The firm’s partners always said no. But when the big Chicago-based firm came calling again in 2014, the answer changed.

“I trust my instincts,” Goldfarb says. “Our industry was changing rapidly and I had no doubt this was the right thing for our clients, our partners and our employees. To this day, I think it was the right thing to do and I’ve never looked back.”

Here’s an inside look at how the two firms united, giving BDO USA a long-sought foothold in Ohio and giving Goldfarb — now Ohio managing partner for BDO USA — the resources to drive his team forward into a new way of doing business.

Starting small

SS&G was largely created out of necessity. Goldfarb had two young children and a third on the way. After working in public accounting for 13 years, he took that experience and started his business. In 1987, he partnered with Gary Shamis and Bob Littman to form SS&G with the goal of doing more than just helping clients file their tax returns and financial statements.

“We saw an opportunity to provide consultant services, particularly for the middle market,” Goldfarb says. “These people were hungry. How do I borrow from the bank? How do I buy that land? How do I get these tax credits? How do I make a deal to bring this person on as a key employee when I don’t have the money? There weren’t a lot of people who had the skill set to do these things.”

Over the years, SS&G grew from a small firm with about 10 employees to a company with more than 500 employees at 12 offices in four states. The firm expanded its services to include specialized divisions focused on payroll management, health care consulting and wealth management, which the partners retained after the BDO USA deal.

“It’s become a more complicated world, a world of specialization and a world of niches,” Goldfarb says. “If you’re a CEO or an entrepreneur, more than ever, you need to surround yourself with the right people and the right skill set.”

Along those lines, you also need to keep an open mind as it relates to your company’s future.

And that’s where private equity comes into play. “When you’re a regional or local accounting firm, it’s tough to credential with private equity companies,” Goldfarb explains. “Their investors typically are looking for their assurance partners to have a nationally known name to their investors. No matter how good you are, it’s tough to get credentialed in the private equity space if you’re a local or regional accounting firm.”

Goldfarb is confident SS&G could have continued for years to come, but joining forces with a firm like BDO USA would provide opportunities he just couldn’t pass up.

Always be ... skeptical?

BDO USA is part of the BDO global network, the world’s fifth-largest accounting organization behind EY, Deloitte, PwC and KPMG with more than 67,000 global employees and $7.6 billion in 2016 revenue.

While SS&G brought a significant Ohio presence to the deal, BDO USA provided access to “incredible technical resources” that gives the nearly 500 former SS&G partners and professionals an international presence.

Still, Goldfarb owed it to everyone to maintain a critical eye from the start of the negotiation.

“It’s my job as a business adviser to clients and certainly as an owner/founder to be skeptical,” Goldfarb says. “Is it the right culture? How would our clients react? How would our partners react? How would our staff react? You go down that road and try to deal with all of these issues and questions that you have in your mind. We went down the list to get answers to our questions and concerns. We spent a lot of time and had an incredible amount of meetings and internal conferences. It wasn’t a quick decision.”

This would be a game-changing deal, but it wasn’t the firm’s first deal.

“We’ve always been entrepreneurial,” he says. “We had done more than a dozen large and small mergers and started a number of different businesses in my years. So we always had the attitude that we wanted to talk to everyone and see if there was an opportunity. If anyone wanted to talk to us, it didn’t cost us anything to listen. You can always learn something from every meeting you’re in.”

That openness helped Goldfarb become familiar with BDO’s culture and its approach to its work. So it didn’t take long for that skepticism to fade.

Still, many deals get off to a great start and come apart at the end. Goldfarb still had a few hurdles to cross before this deal could be completed.

Details, details, details

One of the most important things you need to do as a business owner when negotiating a deal is to step out and look at the deal from a different point of view, Goldfarb advises.

“You really need to look at it from the perspective of the people around you and your customers,” he says. “If it’s the right thing for them, it will be the right thing for the owner. An owner has to put his or her personal situation to the side. If you don’t do that, it’s going to backfire.”

You also need to scan the details closely and be sure that nothing has been overlooked that could come back to bite you after the deal has been signed.

“Something I’ve always said to clients over the years is that it’s not so much the price, it’s the rate and terms,” Goldfarb says. “What’s key at a certain point is that there has to be a lot of trust and goodwill between the leaders of the buyer and the leaders of the seller. You have to trust in one another to get the deal done.”

Another crucial step on the path to closing a deal is flexibility. “I’ve seen it where somebody just says, ‘Here’s a line in the sand and that’s it,’” Goldfarb says.

“I’ve seen where clients have blown an opportunity to sell their business for a lot of money because they were penny-wise and pound-foolish. One of my favorite sayings in business is that pigs get fat and hogs get slaughtered. It’s really the truth. Whether you’re the buyer or the seller, everybody wants to get whatever they want to get. But sometimes you can blow an opportunity by pushing too hard. You have to maintain a certain level of flexibility and look at the big picture.”

The deal to merge SS&G with BDO wrapped up in January 2015. While there was a great deal of conversation and due diligence, Goldfarb says there were no big sticking points.

“Everyone has a unique specialization,” he says. “Even though we had it at SS&G, it’s been magnified given BDO’s added resources. Any client that has any issue, we’ve got the expertise not only domestically, but internationally. That was always one of the things we thought would happen and it has happened.”

Transparency on both sides can go a long way toward creating a smooth transition in most business deals, particularly at a time when the world is changing and growing more complex.

“Be transparent with your people and communicate exactly what you are doing and why you are doing it,” Goldfarb says. “Being honest and forthright is always the answer.”

How to reach: BDO, www.bdo.com