Moss Adams + Hein: A Strategy for Success in the West

Dave Follet

Dave Follet

As reported by INSIDE Public Accounting on Aug. 24, Seattle-based Moss Adams (FY16 net revenue of $527 million) intends to fill two holes – in geography and in service – with its planned Nov. 1 merger with Denver-based Hein & Associates (FY16 net revenue of $61 million).

Moss Adams president and COO Dave Follett tells INSIDE Public Accounting that Hein not only gives the firm a foothold in Denver, a critically important market in the West, but Hein’s oil and gas industry expertise adds a new practice area.

Follett says leaders from the two firms began talking at the end of last year. After exchanging information and meeting with partners, “it become more and more evident that it was a great fit.” And naturally, Follett says the two firms have similar cultures. People on both sides get along and both firms have long histories. Moss Adams is more than 100 years old and Hein was founded 40 years ago. Leadership has been handed down to new generations and Hein has maintained sustainable growth, showing the firm is being managed for the long term. “They have a stewardship mentality,” Follett says.

Follett noted that the firm has become more active in Texas, which was another reason why Hein was a good match. Hein has an office in Houston, where Moss Adams was looking to expand, and Dallas. Last year, Moss Adams acquired CF Accountants & Consultants of Dallas, adding 57 staff, including seven partners, to increase the Moss Adams staff to nearly 90 professionals in the city.

The growth is part of Moss Adams’ strategy to become the dominant middle-market firm across the West, and Follett says the firm does not want to expand farther east for now. Moss Adams plans to continue strengthening its presence in both Texas and California, where Hein has an Orange County office, in the next three to five years. “We’re very, very dedicated to the opportunities in California.”

Follett says the firm is also looking at strengthening its technological capabilities. “We are making investments in both evaluating and piloting those emerging technologies in machine learning, data analytics and AI, and trying to stay very much in tune with the opportunities we have to leverage what we do on a day-today basis.” While many observers say the biggest effects may be felt by auditors, Follett says, “I don’t see any area that won’t be impacted in the coming years, even though audit and assurance may be on the forefront.”

Moss Adams is ranked No. 14 on the 2017 IPA 100 list, and Hein is ranked No. 67. Revenues of the combined firm will near $600 million and will bring total staff to nearly 2,900. Hein will add the two new office locations, and about 300 new personnel to Moss Adams, including 35 partners. Hein MP Jim Brendel will become MP of Moss Adams’ central region, which includes locations in Colorado, Texas, Kansas City, Kan., and Albuquerque, N.M.