BDO Buys $300 Million CPA Firm as Accounting Deals Race Ramps Up

BDO USA P.C. said Wednesday it will acquire Horne LLP, expanding its footprint in the Southeastern US along with its state and local government practice and creating a $3.2 billion combined accounting and advisory firm.

The stock deal with Horne, a top 40 firm, is scheduled to close in November. Additional terms weren’t disclosed.

The expansion, the largest in BDO’s history, will add 1,300 employees to its roster and positions the firm to challenge Baker Tilly for its rank as the sixth-largest US firm by revenue.

Horne, with nearly $300 million in revenue, specializes in supporting state governments with distributing disaster recovery funds and also focuses on the health care and construction industries.

The deal is just the latest to shuffle the 10 largest firms in the US amid a wave of private equity deals and mergers among peers as firms jockey to lock in market share and invest in technology.

Unlike many of its competitors that took on private equity deals, BDO created an employee stock ownership plan that over time will own the entire firm. The retirement plan gives front-line staff and principals a stake in the business and frees up cash thanks to the plan’s tax benefits.

The firm is pursuing several more deals, said Wayne Berson, the CEO of BDO who is set to retire next year.

“It’s a good deal for both sides,” Berson said of Horne. “It certainly takes advantage of everything we aimed for when we did the ESOP. This is what we’ve been looking for.”

Horne CEO and managing partner Rusty Butcher said BDO’s structure rewarding staff was critical in setting it apart from others that sought to cut deals with his firm. Horne’s staff and clients will also benefit from BDO’s resources and technology, Butcher said.

“We wanted to make sure that we had an opportunity for our team members to thrive. We really value the team, want to make sure that they feel like they’re taken care of and in a spot where they can be successful,” Butcher said.

Butcher will join BDO’s board and will be a principal at the firm helping to support the transition, he said.

BDO plans to create a subsidiary to run the disaster recovery practice, a roughly $200 million service line operating across the country and in Puerto Rico.

The combination also expands BDO’s geographic reach beyond its southern hub in Florida into seven southern and southeastern states, as well as Washington, DC and Puerto Rico.