KPMG Peat Marwick will announce today that it has acquired Barefoot, Marrinan & Associates, one of the nation's leading consumer compliance consulting firms.
The accounting powerhouse said its union with Barefoot, Marrinan strengthens its three-year old consumer compliance group.
"This not only adds to our capabilities in risk management, but it is a big addition to the whole firm," said Steven M. Roberts, the Peat Marwick partner in charge of the regulatory advisory practice.
Founder Jo Ann S. Barefoot said her firm lacked the resources to remain independent.
"We've always thought of ourselves as a niche player who could do it better than anyone else," Ms. Barefoot said Monday. "But we had to look at where compliance is going."
Bankers are demanding comprehensive risk management strategies and high- tech compliance systems, she said, adding that a 12-person boutique can't provide those services without outside help.
Barefoot, Marrinan has been one of the fastest-growing regulatory consulting firms, pioneering the development of fair-lending and Community Reinvestment Act compliance programs.
The firms began serious negotiations in February and wrapped up the deal in early May. Peat Marwick, which provides accounting or consulting services to 60% of the banking industry, was a natural fit, Ms. Barefoot said.
"They were by far the most noticeable competitor we had," she said.
Neither Ms. Barefoot nor Peat Marwick officials would disclose terms of the purchase. The firms plan to notify clients of the merger starting today.
Peat Marwick will keep all of Barefoot, Marrinan's employees and continue to offer the same services. The consulting firm's prices will not increase, according to Ms. Barefoot.
Mr. Roberts said Peat Marwick hopes to take advantage of the added staff to expand its consumer compliance practice to cover insurance, mutual funds, and broker-dealer activities at banks and nonbanks.
"This gives us a larger critical mass so we can deal with new issues quickly," he said.
That doesn't mean that providing advice on fair-lending and CRA matters will cease to be a major facet of her business, Ms. Barefoot said. "These issues just keep growing," she said.
The accounting firm is expected to vote shortly on making Ms. Barefoot a full partner in charge of the consumer compliance group. She will continue to be based in Columbus, Ohio.
Timothy D. Marrinan - the firm's other name partner - will join Peat Marwick as director of the compliance group. He will continue to be headquartered in Bloomington, Minn.
Mr. Roberts, whose firm employs more than 78,000 accountants and consultants, said the merger doesn't represent the demise of small compliance firms. "There will always be someone who leaves a regulatory agency and hangs up a shingle," he said.
After four years as deputy comptroller of the currency in charge of compliance, Ms. Barefoot started her consulting firm in 1982.