BDO USA LLP announced that it is expanding its Philadelphia presence with the addition of Asher & Co. Ltd, for an undisclosed amount. The deal is scheduled to close on November 1.
In light of the deal, BDO will gain more than 100 staff members, which includes 10 partners. BDO’s Philadelphia roster will now have 176 staff members.
Asher, which is ranked as one of the top firms in the Philadelphia market, assists clients in the manufacturing and distribution, professional services and nonprofit industries. The firm is also considered to be one of the leaders serving the real estate and public housing sectors.
“Asher has a tremendous reputation in real estate,” Wayne Berson, BDO’s CEO-elect, said in an interview with Accounting Today. “I’m trying to take an industry we have critical mass in, and expand it based on the expertise that BDO has as a firm. Add that to the reputation Asher has, and suddenly one plus one equals three.”
Allan Koltin, CEO of Koltin Consulting Group, who advised Asher on the deal, said there were several national firms interested in them. “In the end, they chose BDO due to their great leadership, culture and resources,” Koltin said in a statement. “It was ‘love at first sight’ for both firms and I can't recall a smoother merger discussion than this one.”
According to Koltin, Asher’s managing partner, Joe Beach, was focused on his client's needs, as well as growth and career opportunities for the staff. “In joining BDO USA, we feel we’ve found a national firm with a very compatible practice philosophy and culture to our own,” Beach said in a statement.
BDO’s latest addition comes roughly two weeks after it announced that it will merge in McLean, Va.-based Argy, Wiltse & Robinson PC. (see BDO Brings Argy On Board)
“When I was elected to succeed Jack Weisbaum, I decided to focus a great deal on growing through M&A,” said Berson, who will take on his role as CEO on November 1.
Berson has three characteristics in mind when looking for acquisition targets -- building greater critical mass in existing major markets; expanding geographic coverage in new strategic markets; and adding extra resources in existing industries and service areas. He said Asher fit those priorities well.
“For us, this is a key market that I felt we didn’t have enough critical mass in, and I‘ve been looking to expand throughout the region. Philly’s not a new market for us, but it is a critical area, since it connects the Northeast Corridor to the Greater Washington Area,” explained Berson, who had previously served as regional managing partner for the firm’s Atlantic region.
"This will give BDO a formidable office in the area," said M&A consultant Jay Nisberg. "This deal combined with the Argy deal demonstrates BDOs commitment to regain a strong position in the top 10 once again."
BDO expects to continue its shopping spree, but Berson noted that there may be a time limit on the current strong market for firm mergers. “We probably have two years left to do deals,” he said. “There are a number of excellent firms out there that would be excellent targets for national firms, and I want to move quick enough to take advantage.”
To help identify future acquisitions Berson reached out to his teammates. “I have challenged other regional managing partners to find opportunities in their regions. I want to have the other parts the country come into play.”
Berson is confident that his strategic growth plan will play out smoothly, given that the firm has a good story to tell potential merger partners – and his own rise is a big part of that. “My background as a partner from a merged-in firm is very helpful when telling the story to potential partners. The first thing they want to know is, ‘What happens to us when we get assimilated? Will we get lost in the shuffle?’”
BDO’s pipeline of potential targets looks promising. The firm is currently in discussions with a number of firms throughout the U.S. “I wouldn’t be surprised if we had more announcements," said Berson. "We’re coming up against the end of the year, of course, so it may be difficult, but we are talking to many other firms.”
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