Acquisitions, expansions driven by strengthening area economy
Regional accounting firms that recently made efforts to expand in the Napa Valley are moving into the next phase, positioning themselves with hiring and training in a county that has rebounded strongly after the worst of the recession, especially in the wine industry.
Among those expanding in the region is Seattle-based Moss Adams, which acquired Napa-based Rabanal & Smith as part of a planned expansion into the Napa Valley in August 2012.
The firm has hired a senior auditor, a staff accountant and a third staff member to the office since the transition, and is looking to eventually add two more individuals amid projected growth in client demand, said Jeff Gutsch, partner and wine industry group leader at Moss Adams. The office has also played regular host to regional staff for Moss Adams, which bases its wine industry practice in Santa Rosa.
Though the office now carries the Moss Adams name, the firm has made an effort to facilitate a smooth transition for clients of the former Rabanal & Smith, Mr. Gutsch said. Founding partners Jennifer Rabanal and Amy Smith joined Moss Adams as partners, and four remaining employees were also brought on board.
A physical footprint in the Napa Valley is expected to provide a more convenient base for connecting with current and prospective clients in wine, food and beverage manufacturing and other industries in Napa and Solano counties, Mr. Gutsch said.
“It’s going exactly as it was planned,” Mr. Gutsch said. “After six months, to me, for an office of six people, that’s a lot of growth.”
Also among those with new offices in the region is Santa Rosa-based Zainer Rinehart Clarke CPAs, which added a third office, in St. Helena, in November 2012.
The opening coincided with the hiring of seven individuals, including well-known wine industry accounting leaders like Dale Brown and Robert Holder, said Meredith Rennie, owner and director at Zainer Rinehart Clarke. The firm also recently hired four graduates of Sonoma State University’s accounting program as staff accountants, she said.
Ms. Rennie estimated that the firm’s client base has grown between 25 and 30 percent since the addition of the St. Helena office.
“It’s grown exponentially,” she said, describing how staff have been able to move between offices to serve a wine industry client base primarily composed of boutique, family-owned operations in Napa and Sonoma counties.
St. Helena-based Brotemarkle, Davis & Company moved to a new office in St. Helena’s Wine Business Center in October of 2011, designing an open work environment that would facilitate conversations among staff and enhance the firm’s focus on mentoring young accounting professionals, said David Brotemarkle, partner at the firm.
“For us, as a firm that wants to last a long time, it’s important to nurture the upcoming generation,” Mr. Brotemarkle said.
The firm has continued with a long-term plan of growing its staff by 10 percent every year, he said. Today, the firm has more than 15 people on staff and approximately 100 winery clients.
“The Napa Valley was harmed less than other areas in the downturn,” he said. “While the Napa Valley wine industry is constrained by the number of grapes available, there is always new interest.”
New hiring has also occurred at Napa-based G&J Seiberlich and Company, which in January announced the addition of four new staff members in response to demand in both Solano and Napa counties. The firm added a manager, two staff accountants and a work flow coordinator.
Greg Bennett, partner, noted that economic growth has been particularly strong in Napa in the past year to 18 months. The firm expanded to Solano County in 2010 with the acquisition of Vacaville’s Chandler & Associates.
For Frank, Rimerman + Co., responding to demand at its St. Helena office has recently come in the form of company-wide training in wine industry accounting, said Rob Morris, partner at the firm and head of its Wine Business Services Group. Staff at the firm’s other four offices provide services for the senior staff in St. Helena, supporting an inflow of new demand driven largely by a recent wave of merger and acquisition activity, he said.
“From the start of the recession to now, the nature of that activity has gone from distressed situations to strategic decisions,” said Mr. Morris, who also noted a surge in tax planning before the so-called “Fiscal Cliff.”
That same activity has been generating more work for the region’s law firms as well, spurring hiring after a period when a slowed economy reduced demand. [See "Legal needs grow with demand for North Coast wine," Jan. 14, 2013.]
Yet in addition to a recent boost from demand from acquisitions and consolidations, leaders from the region’s firms said the North Bay has remained a strong environment for small wineries and startups and that an uptick in activity across the industry has helped to lift professional firms across the board.
“There are continued opportunities for boutique wineries and startups,” Mr. Gutsch said. “There’s always new stuff cropping up.”
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