BDO USA merges with Argy in bid to expand presence in contracting sector
By Sarah Halzack,
Professional services firm BDO USA announced last week that it would merge with McLean-based accounting group Argy, Wiltse & Robinson, a move that boosts the Chicago-based company’s East Coast presence and increases its access to the region’s lucrative government contracting sector.
The merger, effective Nov. 1, is a sign that as some Washington area contracting giants consolidate, so, too, will some of the firms that service them.
“What happened is that our growth started slowing down because we had a lot of our larger clients sell,” said Paul Argy, chief executive of Argy, Wiltse & Robinson.
Argy wanted to land bigger national and international clients but lacked the reach to do so. The firm considered trying to make acquisitions to expand, but ultimately decided that process would take too long. So it began talking with BDO about a merger.
“We just felt like if were going to go national, then this is probably the best way to do it,” Argy said.
In the Washington area, where BDO has an office in Bethesda, “we are a leader in the nonprofit industry, but we do not have sufficient market presence in the government-contracting arena,” said Wayne Berson, BDO’s chief executive-elect.
Because Argy’s business is largely built around servicing about 200 contracting companies, Berson said he hopes the deal enables his firm to become a more dominant local player.
Argy was in an unusual position as it angled for the merger. With $50 million in revenue last year, “Only 10 firms are really big enough to buy you,” Argy said.
Some of those larger firms already have robust government practices; others prefer to grow their business on their own instead of by acquisition. And among those 10, some aren’t currently using acquisitions as a core business strategy.
The deal adds 225 employees, including 26 partners, to BDO’s staff. That means the firm will employ 370 workers in the Washington region and nearly 3,000 nationwide.
The financial terms of the arrangement were not disclosed.
BDO plans to turn Argy into a “center of excellence” for all of its contracting business across the country. It will be a hub for devising best practices and strategy in the contracting sector.
“They will be the resource in terms of answering questions, fielding technical inquiries, helping win new major clients, and making sure our quality control is of the highest order,” Berson said.
Berson plans to make mergers and acquisitions a central part of BDO’s expansion strategy when he officially steps into the chief executive position Nov. 1. He said he is in discussions with “about a dozen” firms across the country to broker similar deals. He aims to advance those talks as quickly as possible, because December marks the start of busy season in the accounting industry, which makes it difficult for firms to find time to consider such offers.