Andersen city office is bought by rival

Ernst & Young firm also acquires operations in Richmond, Vienna, Va.

May 17, 2002|By Meredith Cohn | Meredith Cohn,SUN STAFF

The accounting firm Ernst & Young LLP continued its shopping spree yesterday, picking up three more offices of its scandal-troubled rival Arthur Andersen LLP, including the Baltimore operation.

Ernst & Young will gain Andersen's audit and tax business in Baltimore and about 100 workers, including seven partners.

The company has been acquiring offices around the country since Andersen became embroiled in the troubles of a client, Houston energy giant Enron Corp. The latest three acquisitions bring the number of offices bought by Ernst & Young to about a dozen.

Offices in Baltimore and Richmond and Vienna, Va., will bring 350 workers into the Ernst & Young fold, giving the company about 2,500 professionals in the mid-Atlantic region.

"This unprecedented combination of extraordinary talent will bolster Ernst & Young's established leadership position in Virginia and Maryland," said Deborah Kissire, managing partner of Ernst & Young's mid-Atlantic area. "The transaction is another significant milestone along our path to success."

Mark S. Bartlett, managing partner of the local Ernst & Young office, said the 100 new employees in his office bring the total to about 285 people.

Ernst & Young did not acquire the Andersen consulting business based in Baltimore, and slightly more than half of the Andersen workers in the city are out of a job. The offices closed Wednesday.

Bartlett said he heard several weeks ago from Andersen clients that they were nervous about the company's future but reluctant to leave. He proposed meeting with Andersen managing partner Scott Somerville, whom he said he has known and respected for 15 years.

There were more conversations by the firms and a meeting of the partners, who wanted to see if they were a good fit. They unanimously decided to take up the issue with their national companies, which agreed to the acquisition. Financial terms were not disclosed.

"The partners found the cultures to be remarkably similar," Bartlett said. "We also came to a very clear conclusion that, with their client base and our client base, we would be a good strategic fit."

Bartlett said he has been meeting with Andersen's clients, none of whom had defected, and expects to keep the majority of the 100 or so firms.

Some of the largest include CareFirst BlueCross BlueShield, Magellan Health Services Inc., Sinclair Broadcast Group Inc., Radio One Inc., Danaher Corp. and the Baltimore Ravens.

Bartlett said the new clients would bolster Ernst & Young's position in several areas, including health care, technology and consumer products.

Andersen workers began a two-day orientation yesterday in Ernst & Young offices on Charles Street. Offices are under construction on Pier 4, next to the Power Plant where Andersen's offices were. Ernst & Young plans to move in about a year.

The Cordish Co., landlord at the Pier 4 and Power Plant buildings, has agreed to release Andersen from its lease for 40,000 square feet of space and expand the Ernst & Young commitment next door of 40,000 square feet by 11,000 square feet.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.