Two Midwestern accounting firms last month announced plans to merge, creating a combined firm that would serve more than 70,000 clients, employ 301 partners, and have more than $314 million in revenue.
But those plans have now been abandoned.
Milwaukee, Wisconsin-based Wipfli, LLP, and Fargo, North Dakota-based Eide Bailly, LLP, said late last week that they will not merge.
Eide Bailly Managing Partner and CEO Jerry Topp and Wipfli Managing Partner and CEO Rick Dreher said in a joint statement that the firms decided to "amicably discontinue merger discussions, because they could not come to an agreement on key terms."
The firms did not specify which "key terms" were sticking points in the merger-which they had previously expected to complete on June 1, pending regulatory approval.
"Wipfli and Eide Bailly are two very successful firms serving distinct markets," Topp said in a news release. "We were friendly competitors before, and we will continue to be friendly competitors in the marketplace as we move forward."
In a Monday phone interview, Dreher declined to discuss the reasons for calling off the merger beyond what was stated in the prepared press release.
Just days after the firms announced plans to merge, news broke that Eide Bailly-which provided professional services to two of convicted Ponzi schemer Tom Petters' business entities-had filed a pre-emptive lawsuit, asserting that it is not liable for any damages related to the case. But Doug Kelley, the receiver who is trying to recover funds lost in the Petters fraud scheme, filed a separate lawsuit accusing Eide Bailly of malpractice in its relationship with the Petters business entities, Thousand Lakes and PAC Funding.
Eide Bailly's lawsuit alleges that attorneys for Kelley have said they will seek "unspecified damages in excess of $25 million," according to a Star Tribune report. But Kelley's lawsuit doesn't specify the amount of damages being sought other than the return of $45,000 in professional fees paid to Eide Bailly.
Court records indicate that the legal matters have not yet been resolved. Dreher of Wipfli declined to discuss whether Eide Bailly's legal battle played a role in the firms' decision to call off the merger.
In Minnesota, Eide Bailly has offices in Minneapolis and Mankato, and Wipfli has locations in Edina and St. Paul. Eide Bailly is the eighth-largest accounting firm in Minnesota based on CPAs in the state, of whom there were 90 as of April 2011. Wipfli is the 13th-largest with 52 Minnesota CPAs.