In a move to build its network of local firms, American Express Tax and Business Services Inc. yesterday acquired the tax and consulting practice of Walpert, Smullian & Blumenthal, one of Baltimore's largest public accounting and consulting firms.
Robert C. Basten, president and chief executive officer, American Express Tax and Business Services, said Walpert, Smullian met his first goal for this market: To find a firm that shared his company's philosophy and had a good reputation.
"Our next goal for this market is to double or triple the business operation in the next five or six years," Basten said.
The sale price of the tax and consultancy practice was not disclosed. The entire firm employs 125 people. Alfred M. Walpert, the managing partner, said the firm's total revenue for the fiscal year that ended Sept. 30 was about $10.5 million.
Howard Wolosky, executive editor of the Practical Accountant, a trade magazine, said that American Express and a competitor, International Alliance Services Inc., are acquiring firms in major metropolitan areas to provide services for small businesses.
"American Express cannot attest to financial statements, so they are buying" accounting firms, Wolosky said. "Both American Express and IASI are gobbling up firms, but the firms wouldn't go along with it unless it was good for them. The industry is reacting to more and more consulting technology firms being bought by drafting a model act saying that the majority ownership of accounting firms must be CPAs."
Walpert said other regional accounting firms had approached him about merging.
"The nature of the practice of public accounting is going through dramatic changes. We've been on the edge of that change," Walpert said.
"When we were called upon by American Express, we started to realize that their vision and our vision were very similar and they offered us resources and technology. Today, if we're going to be successful as a large local accounting firm, capital investing is very important."
Arnold R. Scheinberg, a managing director of Walpert, Smullian & Blumenthal, said the firm's mission and goals will not change because of the acquisition. It will continue to be an independent public accounting firm.
"A number of our clients have thin management teams; they rely on us for strategic planning, process improvements and to select the right technology," he said.
Pub Date: 10/17/97