Following up its purchase of Ohio's SS&G, BDO announced today that it had reached agreement with UHY Advisors to execute….err…acquire its Texas Practice:
The UHY Texas practice provides a broad range of financial and consulting services to a diversified client base with significant strength in the energy, manufacturing, distribution, professional services, healthcare and real estate industries. This transaction is subject to customary closing conditions and is expected to be completed on or about December 1.
UHY's Texas practice includes offices in Houston and Dallas. In our post from earlier this month, we speculated about what a complete acquisition of UHY would look like, but noted that a source told us BDO was "very interested in UHY's Houston practice."
With this announcement, it's clear that they interested in the entire Texas market and with good reason — UHY has the 5th largest accounting firm in Houston. Jerry Walsh, a spokesperson for BDO informed us via email that the total employees in UHY's Texas practice is 450, including 36 partners. Of those 450 staff, 430 are in Houston and 20 in Dallas.
BDO CEO Wayne Berson explains further:
Upon completion of this transaction, we will be the dominant alternative to the Big Four in both the Texas and the national energy markets. These offices established strengths in the energy sector, particularly in upstream and oilfield services, will be an excellent addition to our strong natural resources industry practice. […] Combined with other additions we have made over the past two years, this transaction continues the expansion of BDO's footprint into new markets and elevation of our presence in existing locations.
If you're wondering, like we are, why UHY didn't sell out completely, here's what CEO Tony Frabotta said in the press release:
Many firms have contacted us over the years to inquire about our prominent energy industry experience and SEC practice in the Texas marketplace. As we implement our strategic plan and move forward as a united firm, it made sense to divest our Texas operations and continue our focus on growing as a top middle market services provider.
Allow me to translate — they finally got an offer they couldn't refuse for the Texas business and they still like their positioning in their remaining markets.
It's interesting because while this obviously reduces UHY's size considerably, it might actually strengthen the firm going forward. Or even make them a more obvious acquisition target. Time will tell, I reckon.
Are you a UHY-soon-to-be-BDO CPA? If so, how do you feel about the deal? Are you excited to get to know BDO?
And as far as BDO is concerned, this is a firm that is definitely in the acquisition business; now the question is: Who's next? If you have any knowledge of the firm's strategy or plans, email us.