Growing Trend Or Bad Advice? Midwest Mega-Merger Misfires

In January, Fargo, N.D.-based Eide Bailly (FY11 net revenue of $151.4 million) and Milwaukee-based Wipfli LLP (FY11  net revenue of $136.5 million) announced their plans to merge, on June 1, 2012.

Less than two months after the announcement, the merger has been called off. According to reports, EB MP Jerry Topp and Wipfli MP Rick Dreher described the parting as amicable and due to their inability to “come to an agreement on key terms.”

Was the writing on the wall for this merger? IPA was aware of some outsider negative reports, comments, and blog  postings regarding the planned merger. Egos, culture and “good ole boy’ mentality comments were floating around in cyber-space.

An e-mail posted on Going Concern [] spells out the announcement about the breakup. The e-mail, from EB MP Topp begins with “I have some significant news to share with you today. The management teams of both Eide Bailly and Wipfli have decided to discontinue merger discussions because we could not come to agreement on key terms. The decision not to proceed with the merger was mutual and amicable. Both firms will continue forward as independent firms.”

When the merger was first announced, Topp told IPA that the two firms had been talking for about a year. “We took a look at who we will be competing with in five-to-10 years and what resources they would be bringing to the table. Rick’s firm and our firm were on the same page as to where we wanted to go,” Topp said. At the time of the interview, Dreher added, “We could compete and race each other there or get together and accomplish it quicker.”

It appears as though the two firms will continue to compete. The advice, “Keep your friends close, and your enemies closer,” will have to wait for the next mega-merger.