BDO USA partners in line for windfall after $2b debt deal with Apollo
New York | Senior partners at accounting firm BDO USA are in line for a big windfall after the arrangement of a $US1.3 billion ($2 billion) debt deal with Apollo Global Management, according to people familiar with the situation.
The private capital group is providing $US1.3 billion in debt financing to fund purchases of shares by a new employee trust, as well as to refinance some of BDO USA’s existing obligations.
The trust will use a portion of the funds to buy a minority stake in the firm from existing partners, the people said.
The financial restructuring comes after BDO USA decided to abandon the traditional partnership model used by other large accounting firms in search of tax advantages and greater flexibility.
The firm legally became a corporation at the beginning of last month, turning its 860 partners into employee-shareholders, although they continue to use the term “partner”. The largest shareholdings went to executives at the top of the firm and those with longer tenures.
BDO USA is the sixth-largest accounting firm in the US by revenue, having grown annual revenues from about $US600 million a decade ago to $US2.8 billion in the financial year just ended, under the longtime leadership of chief executive Wayne Berson.
The firm is part of an international network of firms which share the BDO brand. The BDO USA restructure does not affect BDO in Australia, a spokeswoman for the Australian firm said.
“As an independent firm within the network, BDO in Australia is not changing its structure and is not affected by decisions made by the USA firm,” she said. “I can confirm that BDO in Australia is unaffected by [the] decision made by US counterparts.”
The debt deal with Apollo marks one of the largest deployments
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