By ALLISSA KLINE
akline@bizjournals.com | 716-541-1612

The number of accounting firms in Western New York will likely shrink in coming years as an anticipated national upswing in mergers and acquisitions gets under way.

Local professionals expect the pace to pick up following a steep slowdown during which few, if any, local firms bought or sold practices. A June announcement from The Bonadio Group LLP that it planned to purchase the Syracuse branch of ParenteBeard marked one of the first CPA acquisitions involving a local firm since the economic crisis began in 2008.

And there will be more. Last week, Tronconi Segarra & Associates LLP of Williamsville merged with the all-female firm of Domachowski Kempisty & Salvatore CPAs PC in Clarence after 18 months of negotiations. It is the second acquisition in Tronconi's history, a boost to its tax expertise, and the firm is actively looking for more opportunities. Since the Nov. 2 announcement, it has fielded a handful of calls from other firms interested in similar merger options, Managing Partner James Segarra said.

"We're working really hard to grow organically. We've done a great job of enhancing our market presence and developing our image," he said. "But once this transaction is complete, we're going to look for other candidates that fit the same type of profile. I know we'll continue to look at opportunities."

There's a long list of reasons for the anticipated uptick in merger-and-acquisition activity within the accounting industry - more regulations, an increase in the need to specialize, fewer seasoned professionals - but the increase will be largely driven by an aging population of CPAs who lead small firms without succession plans in place, professionals say.

Firms that aren't grooming future leaders will look for chances to join another firm in order to perpetuate their business, unless they decide to simply close shop.

The Bonadio Group, a Rochester firm with an Amherst office, aggressively pursues acquisition opportunities in order to expand its footprint and grow its staff. It is currently targeting the Hudson Valley market, though it would like to acquire smaller firms in Buffalo and Syracuse to raise its staff levels there. Right now, it employs between 50 and 60 people in Buffalo but hopes to build up to 100, said CEO and Managing Partner Thomas Bonadio.

"We're in constant contact (with firms) in the Buffalo, Rochester, Syracuse and Albany markets, and some of them are pretty good-sized firms," Bonadio said. "Some of them are smaller and some of the discussions have been going on for a while. We have a number of firms in Buffalo that we are, let's call it, dating. There's nothing imminent, but we hope the timing is coming around."

Not all local firms, however, look to scoop up smaller practices. Dopkins & Co. LLP, the third-largest CPA firm in Western New York, grows by adding accountants on an individual basis, said Managing Partner Tom Emmerling.

The firm's last merger took place about 30 years ago, he said.

"We've developed young people who started with the firm - like myself who started as an intern - and they're still with us as partners to take over for people like myself who are baby boomers," Emmerling said. "If (another firm) has a compatible culture to ours and it works with our long-term strategy of remaining independent, we're very open-minded to that. But that's not a strategy we've decided to use as our primary way to grow."

The executives at Lougen Valenti Bookbinder & Weintraub LLP feel similarly. The average age of the partners is over 50, so the firm is trying to address succession planning now to set up future leadership, said tax partner Keith Bookbinder.

"We have not aggressively been looking to acquire other firms, but we are putting in place a plan for succession to occur internally so that we can avoid the requirement of selling out at some point in time," said Bookbinder, whose company employs 21. "We'd like a nice, natural progression to keep the firm going as it is."

Back at Tronconi, the firm hopes to reach 150 total employees by 2015.

The addition of 15 staff from DKS bumps the number to 95. That leaves room for growth, which may come from the two or three ongoing discussions between the firm and local potential merger partners, Segarra said.

"None of them have exit plans, so we've left the door open," he said.