Ad­vi­sors Um­baugh, Spring­sted In Com­bi­na­tion With Baker Tilly

The Bond Buyer - - Front Page - BY NORA COLOMER

In­di­ana-based mu­nic­i­pal ad­vi­sor Um­baugh and As­so­ciates, LLP and Min­nesota-based Spring­sted, Inc. are be­ing ac­quired by Chicago-based Baker Tilly Vir­chow Krause, LLP in a move that po­si­tions the com­bined firms to be­come a top 10 mu­nic­i­pal ad­vi­sor.

Baker Tilly is a pub­lic ac­count­ing and con­sult­ing firm that doesn’t cur­rently of­fer mu­nic­i­pal ad­vi­sory ser­vices, al­though it is reg­is­tered to do so. It is the largest of the three firms with 45 of­fices and 3,000 em­ploy­ees.

Spring­sted and Um­baugh were ranked 22 and 23, re­spec­tively among mu­nic­i­pal ad­vi­sors in 2018, cred­ited by Thom­son Reuters with vol­umes to­tal­ing $2.5 bil­lion and $2.2 bil­lion.

The com­bined vol­ume of $4.7 bil­lion would have placed them in the top 10.

“The rank­ings are go­ing to go up clearly,” Spring­sted Pres­i­dent Kath­leen Aho said.

“If you look at 2017 num­bers our com­bi­na­tion of sales would put us in the top 10 long term for fixed rate for both vol­ume and sales,” she said. “It’s not all about be­ing big, we want to be best, and now we have an

op­por­tu­nity to be both.”

Vicki Hel­len­brand, Baker Tilly part­ner and pub­lic sec­tor prac­tice leader, said that the com­bi­na­tion of the three firms is ex­pected to be ef­fec­tive in first quar­ter of this year.

Um­baugh and Spring­sted will be part of Baker Tilly’s pub­lic sec­tor prac­tice led by Hel­len­brand.

“We are ded­i­cated to the pub­lic sec­tor by serv­ing state and lo­cal gov­ern­men­tal units and non-profit or­ga­ni­za­tions,” Hel­len­brand said of all three firms.

Um­baugh and Spring­sted lead­er­ship are join­ing Baker Tilly and de­ci­sions and day-to-day man­age­ment will re­main lo­cal.

Baker Tilly’s long-es­tab­lished pub­lic sec­tor group is a team of 220 pro­fes­sion­als serv­ing nearly 1,000 govern­ment clients.

It pro­vides au­dit and ad­vi­sory ser­vices to the pub­lic sec­tor, in­clud­ing fi­nan­cial fore­cast­ing, tax-in­cre­ment fi­nance pro­jec­tions, con­sol­i­da­tions and shared ser­vices, foren­sics and ex­pert wit­ness ser­vices, en­ter­prise re­source plan­ning, process and ef­fi­ciency anal­y­sis, and in­ter­nal con­trols re­views and rec­om­men­da­tions.

The com­bined firms will re­brand as Baker Tilly fol­low­ing a tran­si­tion pe­riod of nine to 12 months.

Hel­len­brand said the three firms chose each other be­cause of their strengths and re­spec­tive lead­er­ship.

“We re­ally are com­ing to­gether; we want to co-cre­ate, truly take the best ideas and prac­tices and build some­thing even greater to­gether,” said Hel­len­brand.

“In this case, the op­por­tu­nity is even more special where Spring­sted and Um­baugh and Baker Tilly are do­ing some­thing that hasn’t been done be­fore,” she said.

“The com­bi­na­tion of these three firms just of­fered great ad­van­tages to our clients and also to our staff in terms of the re­sources that we have avail­able,” Spring­sted Pres­i­dent Kath­leen Aho said. “The ac­cess to ex­pand the tal­ent and ex­per­tise within these three firms re­ally cre­ates a pow­er­house that is kind of like a candy store, shop­ping for the tech­ni­cal ex­per­tise that you need in any of the ar­eas that we have to be good at in or­der to serve our clients well.”

Um­baugh fo­cuses solely on fi­nan­cial man­age­ment, cap­i­tal plan­ning, bond is­suance and post-is­suance ad­vis­ing and con­sult­ing for mu­nic­i­pal­i­ties, util­i­ties, schools, li­braries, coun­ties and town­ships.

The firm has four Mid­west of­fices in In­di­anapo­lis; Mishawaka, In­di­ana; Colum­bus, Ohio; and Lans­ing, Michi­gan. The firm has 120 team mem­bers.

Spring­sted’s pub­lic fi­nance ser­vices in­clude mu­nic­i­pal fi­nance and post-is­suance com­pli­ance, op­er­a­tional fi­nance, in­vest­ment and hous­ing and eco­nomic de­vel­op­ment ser­vices.

The firm also spe­cial­izes in pro­vid­ing hu­man cap­i­tal ser­vices for pub­lic and non-profit or­ga­ni­za­tions.

Spring­sted is head­quar­tered in St. Paul, Min­nesota, and has of­fices in At­lanta; Chicago; Dal­las; Den­ver; Kansas City, Mis­souri; Mil­wau­kee and Rich­mond, Vir­ginia. The firm has 68 team mem­bers.

“In the last decade Baker Tilly has seen clients’ needs evolv­ing re­quir­ing more so­phis­ti­cated ser­vices and some of those ser­vices were best pro­vided by part­ner­ing with strong firms that have a back­ground in the mu­nic­i­pal ad­vi­sory space,” Hel­len­brand said.

“We saw that aside from ser­vices Baker Tilly al­ready of­fered in the pub­lic sec­tor, one large miss­ing piece was the abil­ity to do mu­nic­i­pal ad­vis­ing,” she said. “The firm is reg­is­tered to be a mu­nic­i­pal ad­vi­sor but in or­der to bring these ser­vices to the mar­ket­place as quickly as we felt our clients needed them, part­ner­ing with the firms was the best ap­proach.”

Aho said that com­bin­ing the firms will al­low them to more ef­fi­ciently tackle the in­creased reg­u­la­tion of mu­nic­i­pal ad­vi­sory busi­nesses.

“To be able to do that ef­fi­ciently across three firms in­stead of in­di­vid­u­ally across three firms is re­ally a big deal,” she said.

Um­baugh Ex­ec­u­tive Part­ner Todd Sa­muel­son said the firm has seen chal­lenges and op­por­tu­ni­ties in the mar­ket driven by the reg­u­la­tory en­vi­ron­ment.

“Our clients con­tinue to be chal­lenged to do more with less and I don’t think that is unique to our ex­ist­ing foot­print of In­di­ana, Michi­gan and Ohio,” Sa­muel­son said.

“We wanted to con­tinue to po­si­tion our­selves in this com­bi­na­tion to ex­pand our foot­print and be able to pro­vide the ser­vices we have pro­vided for years, in ad­di­tion to what Spring­sted and Baker Tilly pro­fes­sion­als bring to the ta­ble,” Sa­muel­son said. “We think it’s a great long-term play for the firm, for our clients and the peo­ple that we have here at Um­baugh.”

Um­baugh’s per­spec­tive comes from a pe­riod of sig­nif­i­cant growth that Sa­muel­son ex­pects will con­tinue.

That high level of growth over the past few years has chal­lenged to the firm’s plat­form in terms of sup­port sys­tems for staff re­cruit­ment, staff de­vel­op­ment, staff train­ing and ar­eas of tech­nol­ogy and its in­vest­ments in data, he said.

“Com­bin­ing the firms al­lows us to tap into a plat­form op­por­tu­nity that is fur­ther down the road and more ad­vanced than [what we of­fer], “Sa­muel­son said. “We can get there but it would take us more time and in­vest­ment to. Com­bin­ing the firms al­lows our part­ners, prin­ci­pals, directors and pro­fes­sional staff to fo­cus more on client needs and client ser­vices as op­posed to plat­form needs.”

Aho said that com­bin­ing the firms al­lows Spring­sted to gain ex­per­tise in ar­eas the firm had not yet fully de­vel­oped such as higher education.

Sa­muel­son that com­bin­ing their ex­per­tise will cre­ate not only a big­ger firm but a bet­ter firm.

“Hav­ing a firm that has a fully de­vel­oped power of ser­vices and go­ing back to chal­lenges and op­por­tu­ni­ties in the mar­ket that we see to­day — whether its in­fra­struc­ture or eco­nomic de­vel­op­ment, pub­lic schools — these sec­tors are all do­ing more with less and our mis­sion is what we can do to make the qual­ity of life in those com­mu­ni­ties bet­ter,” he said. “That is a role we take very se­ri­ously.” ◽

“We want to co-cre­ate, truly take the best ideas and prac­tices and build some­thing even greater to­gether,” said Vicky Hel­len­brand, pub­lic sec­tor prac­tice leader at Baker Tilly.

Baker Tilly’s Vicki Hel­len­brand will lead the com­bined pub­lic sec­tor prac­tice.

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