Acctg. Firm Eide Bailly Acquires Mpls. Firm, Grows Practice
Accounting firm Eide Bailly LLP, said Tuesday that it has acquired Minneapolis-based Cost Seg Associates, LLC—a move that expands its cost segregation practice.
Cost Seg Associates provides cost segregation studies for commercial property owners. Such studies involve analyzing building purchase or construction costs and breaking them down into different categories for tax purposes, which allows clients to write off certain costs more quickly, thus decreasing tax obligations and increasing cash flow.
As part of the acquisition—the financial terms of which were not disclosed—Cost Seg Associates Managing Partner Rod Axtell was named a partner at Fargo, North Dakota-based Eide Bailly.
The merger will give former Cost Seg Associates’ customers access to a broader network of services, Axtell told Twin Cities Business on Wednesday. Eide Bailly—which is the eighth-largest accounting firm in Minnesota based on CPAs in the state—has 19 offices, including locations in Minneapolis and Mankato.
Axtell said that Eide Bailly previously offered some cost segregation services, but much of the work was outsourced to a third party.
Ron Hecht, head of Eide Bailly’s national tax office, said in a statement that “by bringing our cost segregation services in house, we will be able to help even more clients appropriately minimize their taxes with proper tax planning.”
In addition to Axtell, the other four Cost Seg Associates staffers have also joined Eide Bailly: Robert Lehmann serves as business development senior manager, and Kris Peacock, Travis Mlodzik, and Joe Sawatske serve as construction engineers. They now work at Eide Bailly’s downtown Minneapolis office, and they join two Eide Bailly employees who will also focus on cost segregation studies. The Cost Seg Associates name will no longer be used.
Axtell expects Eide Bailly’s cost segregation practice to continue to grow: “Based on the response I’ve been getting from clients, I fully expect we will expand this staff,” he said, saying that the firm will likely hire two new employees to meet growing demand.
Eide Bailly in January announced plans for a much larger merger—one with Milwaukee, Wisconsin-based Wipfli, LLP. But the two firms later abandoned those plans, saying that they decided to “amicably discontinue merger discussions, because they could not come to an agreement on key terms.”