Clark Consulting Corp. acquired Disabato Associates Inc. on Sept. 1 — just the first in a series of planned acquisitions of independent consulting firms.
Clark, based in North Barrington, Ill., now intends to acquire a New York investment consultant and is fairly close to a deal, said Gregg Buckalew, vice president of Clark's investment consulting practice. He declined to name the object of his firm's courtship.
Acquisitions of consultants in Los Angeles or elsewhere in California, along with Houston or Dallas, are also planned. Compatibility of investment philosophy, committed independence, a strategic orientation toward client solutions and senior consultants who intend to stay with the firm are important considerations for potential acquisition targets, said Mr. Buckalew.
"We are interested in acquiring firms with experienced consultants who are on their way up, not out. We don't plan to fund the retirement of aging consultants with a buyout and liquidation event for them. We don't intend to acquire turnaround stories," he said.
The four senior consulting employees of Chicago-based Disabato Associates clearly met Clark's criteria. They now are operating under the parent company's name but will remain an autonomous unit based in Chicago, said Ted Disabato, the firm's founder and president. Mr. Disabato is now a senior vice president. Employees have equity in the firm, access to in-house actuarial information and benefits plan design for institutional clients, and a more certain future, Mr. Disabato said. He added that by joining Clark and changing its name, Disabato Associates gets away from the cult of personality surrounding an eponymous firm. In fact, a contest among clients last year to rename Mr. Disabato's firm did not inspire a clever new moniker, he said.
Clark Consulting has been on a buying spree since it went public in August 1998, acquiring 23 businesses with a total price tag of $656.7 million, according to the firm's annual report.
But the compensation and benefits consulting firm only entered the investment management consulting industry in May 2002, when members of the human capital group of Arthur Andersen, Chicago, joined Clark Consulting in its Atlanta office. Eight members of the investment management consulting staff came on board as part of that deal, and they brought all of their consulting clients, said Mr. Buckalew.