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BDO USA Acquires SWC Technology, Blends Accounting and IT Services

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Accounting and consulting firm BDO USA has acquired IT solutions provider SWC Technology Partners. Financial terms were not disclosed.

The firm claims the deal will bolster its IT advisory capabilities, grow its headcount by 215 people, and add offices in Oak Brook, Illinois and Indianapolis, Indiana. Furthermore, the acquisition of SWC Technology Partners will help BDO serve the IT needs of its clients and also brings it geographically closer to Chicago, thanks to SWC Technology's office in Oak Brook, the companies assert.

SWC, launched in 1980, offers managed services, data analytics, cloud, and custom app development to mid-market businesses. SWC also supports IT infrastructure (communications, networks and security), as well as software solutions like Microsoft Office 365.

SWC will operate as a wholly-owned BDO USA subsidiary from its offices in Oak Brook and Indianapolis. SWC was previously a portfolio company of Svoboda Capital Partners, a Chicago-based private equity firm.

This is the latest MSP-oriented M&A deal that involves a private equity firm exiting an investment. We expect that trend to accelerate in the weeks and months ahead.

Accounting Firms Buying IT Providers

Multiple accounting firms have acquired technology solutions providers in recent months. For example, audit, tax, and consulting services company RSM US LLP bought Explore Consulting in May to help grow its own consulting practice.

The deals allow accounting firms to provide tech solutions alongside traditional accounting services, effectively growing the scope of the business and potentially giving the firms a competitive advantage vs. traditional accounting firms. After all, as Bloomberg points out, most clients are looking for tax planning and advisory services rather than tax preparation.

Big Four accounting firms, similarly, have also doubled down on tech-focused M&A. Recent deals have included:

BDO USA Growth

According to its own records, from 2012 to 2017,

BDO USA's revenues more than doubled from $618 million to $1.41 billion from 2012 to 2017, outpacing the overall accounting industry's growth rate, the company asserts.

Through both organic and inorganic expansion, BDO USA has entered 24 new US cities and grown its size in an additional 13 existing markets in the last five years. The firm recently acquired Wisconsin-based Smith & Gesteland, a consultancy providing accounting, tax, HR management, and IT services to mid-market businesses.