(Adds comments from bosses of both firms) BDO USA LLP, a Chicago-based corporate accounting and business consulting firm, says it is acquiring Philadelphia accountants Asher & Co. Ltd. and taking on the firm's 10 partners and more than 100 staff.
BDO already employs around 60 in Philadelphia, including partners who formerly worked at Smart & Co. and other former Philadelphia-area firms. Asher boss Joseph Beach will remain with BDO. The partner-owned firms declined to talk about financial terms of the deal. Beach said there won't be job cuts.
The firms have until now competed for Philadelphia-area business from across the street -- BDO at 1800 Market, Asher at 1801. "We want to all be under one roof," but haven't yet worked out who will move, Beach told me.
It's the latest in a string of BDO deals in the mid-Atlantic and follows years of local accounting-firm consolidation. The firm earlier this year purchased the Washington, DC-area firm of Argy, Wiltse & Robinson, which is about twice the size of Asher, and it bought Wilmington-based McBride and Shopa in 2011.
Philadelphia "is an office we're trying to rebuild," after a group of partners left what had been one of the firm's biggest offices here in the mid-2000s, BDO ceo-elect Wayne Berson told me. "I want to expand the geographic coverage we have in new strategic markets. I want to create a critical mass in existing major markets. And I want additional resources in existing industry strengths. Asher can provide us all three."
Asher had planned to be a buyer, not a target, but after talking to "at least 20 firms about merging in with us" since he took over as managing director in 2005, "that was not looking to be an avenue we can grow," Beach told me. "The number of firms that would be partners has shrunk dramatically." After fielding "a lot" of merger offers from larger firms, Beach said he found Berson and his team "likeable guys" who made his partners "comfortable" and their practices and culture "compatible" with BDO's local focus, global reach and industry specialization.
Berson sees "tremendous opportunity" going after local healthcare-related business and expanding Asher's practice as accountant for public-housing authorities, private affordable-housing developers and other real estate clients, a market in which he says Asher has "a fantastic national representation." The deal will make BDO one of the ten largest accounting firms in the Philadelphia area, Berson said.
BDO is part of the multinational BDO International accounting-firm network, the fifth-largest worldwide, "but not enough of the large-cap or mid-market companies in Philadelphia know about our presence," said John McLaughlin, of Newtown Square, who runs BDO's U.S. risk advisory business from his Philadelphia office. He joined BDO with a group from the former LECG (previously Smart & Co.) two years ago.
"In terms of risk advisory servcies, which I head, a lot of companies need oversight of business processes in other countries, and BDO is large enough to support that," McLaughlin added. "That's why I picked BDO. We're on the rebound."
Why all the mergers? Scale: With its national management already in place, BDO can add business without taking on more overhead, Berson told me.
BDO USA has 300 partners and about 3,000 staff in the U.S.; the BDO International global network claims 50,000 worldwide.