BDO USA LLP is acquiring Loughlin Management Partners & Co, Inc., a business advisory firm that provides corporate restructuring and turnaround services, interim management and other services for private equity investors, effective Aug. 1.
The group will operate as BDO Consulting Group, LLC, a separate legal entity and affiliated company of BDO USA, LLP. It will be part of BDO’s Advisory business line. The senior professionals of LM+Co Capital, a boutique investment banking and financial advisory firm specializing in middle market and restructuring engagements and affiliated with LM+Co will also be joining BDO.
As part of the deal with LM+Co, James J. Loughlin Jr., is joining BDO as managing director responsible for leading BDO’s business restructuring and operational value creation practices.
“I’ve been in the business for over 30 years and I was looking for the right fit for me and my team as I looked forward to transitioning the firm,” he told Accounting Today.
Loughlin saw opportunities in the merger for both his firm and BDO. “We brought some complementary services that they were not currently involved with in a major way, and in exchange for that to be given the national footprint, and for that matter international footprint, significant personnel, resources, training and some complementary services that we won’t do,” he added. “It really felt like a great fit for me and my team, and I was very happy to have the opportunity to move forward with the transaction to join BDO.”
Approximately 30 people are coming over from his firm, virtually the entire practice, including seven as managing directors, according to Loughlin.
The addition of LM+Co expands BDO’s array of business advisory services, which already include helping clients with mergers and acquisitions, business restructurings and turnarounds, operational consulting and business improvement, valuation advisory and investment banking.
“BDO is pleased to be joining forces with LM+Co to bolster the resources and national presence of our corporate restructuring and operational advisory solutions, which will greatly benefit our clients,” said Jay Duke, national managing partner of Advisory Services at BDO USA, LLP, in a statement. “We value the quality of service and extensive knowledge of middle-market private equity and restructuring that Jim and his dedicated team of professionals deliver to the marketplace. Our two firms’ commitment to excellence align well and will help to ensure a successful, bright future together.”
Financial terms of the deal were not disclosed. BDO USA ranked 7th on Accounting Today’s 2019 list of the Top 100 Firms, with $1.47 billion in annual revenue, 576 partners and approximately 6,600 employees. Loughlin said the two firms were in talks for about 120 days about the deal. His firm had engaged an investment bank to look into combining with a larger firm, and they arranged the deal with BDO.
“We had engaged an investment banker who had run a formal process,” said Loughlin. “We were looking either for a sale transaction or the opportunity with an entity like BDO, so our banker reached out to a number of potential acquirers and this was ultimately the best fit.”
LM+Co has provided advisory and interim management services in more than 200 restructurings and completed more than 600 other types of engagements. LM+Co works in various sectors serving both private equity and corporate clients, particularly focusing on the health care, industrials, transportation and logistics, retail, technology, media and telecommunications, energy, government and defense contracting, and financial services industries.
“We don’t do any audit work or tax work,” said Loughlin. “It’s purely consulting and other management support services that we provide to businesses, to investors with a very keen focus on the private equity community. BDO has an extensive transaction advisory services practice. I think they worked on over 600 transactions last year. What we bring to the party is a focus on serving private equity portfolios and helping them on the operations side with performance improvement, merger integration, corporate carve-out advisory services, and interim management services — are all areas that we do, that BDO doesn’t really do or they do very little of, so I think it’s an opportunity for us to bring some new services to a very large client base at BDO. As far as restructuring, we’re going to bring a little bit more bandwidth and resources to BDO to help do more in certain aspects of restructuring such as lender advisory and interim management services, so I look forward to working with the team members that are already in place. I know a number of them already. They have good reputations in the community, so I really look forward to working with that team in New York, Chicago and Atlanta and some of the other locations where they currently have restructuring posts.”
Most of the LM+Co team will relocate to BDO’s New York offices, but others will establish a presence for the newly acquired restructuring and operational advisory group in BDO offices around the country, including Arizona, Florida, Southern California, Texas and Pennsylvania.
“Our staff are based in New York; Phoenix; Pittsburgh, Pennsylvania; and Houston, Texas; as well as Florida,” said Loughlin. “We’re going to be based largely out of BDO’s 100 Park Avenue office in Manhattan, but personnel based on where they’re located will also maintain offices around the country.”
BDO USA, based in Chicago, has been expanding its presence in various markets through other M&A deals this year. In May, BDO acquired
For Loughlin, the deal marks a return to a major firm. “It’s exciting for me personally,” he said. “Before I started Loughlin Management Partners nearly 18 years ago, I was a partner at Arthur Andersen for 15 years, so it’s exciting to go back to a larger platform and work with a group of folks with offices around the world that are bringing value to their clients every day.”
