BDO Canada, headquarters seen here in for Vienna, Austria, has purchased Ottawa-based Lixar IT.BalkansCat/iStockPhoto / Getty Images
Professional services giant BDO Canada LLP has purchased Ottawa-based Lixar IT Inc. – the latest in a string of acquisitions by consulting firms looking to bring more artificial intelligence and data science capabilities to their clients.
Dave Keddy, leader of BDO Canada’s advisory service, said his firm’s ability to deliver on demand from its core mid-market customers – corporations with $50-million to $500-million in revenue – for such consulting projects has been expanding “faster than our ability to grow organically."
"We’ve been looking for a partner that was at the current edge of the technology, with people knowledgeable in data science, data analytics and AI to help us accelerate our journey to meeting those client demands … this gives us an accelerant, experience and capabilities that was going to take us too long to grow ourselves.”
Lixar, led by co-founders Bill Syrros, the CEO, and president Emmanuel Florakas, started out in 1999 in an Ottawa basement as a web development company, building websites and creating shopping carts for early e-commerce players. The company grew and evolved to meet shifting IT service needs from clients by developing mobile applications and internet-of-things connections.
The company has been profitable every year, Mr. Syrros said, and now has more than 200 employees and a client list that includes Bell Canada, BlackBerry, Delphi, Allegiant Air, NASCAR and Transport Canada, with its business roughly split between Canada and the United States.
Mr. Syros said his company started building a team in 2013 to meet growing demand for “big data” services (now known as AI and data-driven solutions) from corporate customers to help them to structure and derive insights from their data using AI tools such as machine learning algorithms to help realize operating improvements. “A lot of times they don’t know exactly what they need done and they need someone to come in, review the data, understand better what they have access to and what the potential could be,” Mr. Syrros said.
The business has grown rapidly. AI and data projects now account for more than 30 per cent of Lixar revenue and are projected to account for half by year’s end, with demand coming from a range of industry sectors. Mr. Syrros said the company’s principals considered a range of options last year to ramp up expansion including raising outside capital before deciding to sell to BDO. “We liked their energy and mid-market status,” Mr. Syrros said. “It wasn’t a bunch of suits walking into our offices wondering how many people and resources they had that they could take over.”
BDO Canada, which is nearly 100 years old and affiliated with BDO partnerships in 166 other countries, is best known as a provider of auditing, accounting and taxation services. But consulting, which accounts for about 20 per cent of its roughly $750-million in annual revenue, is its fastest growing segment fuelled by demand for the kind of digital transformation Lixar delivers.
Mr. Keddy said BDO Canada will establish Lixar as its AI and data practice, shifting some of its existing employees in that area to the group under the leadership of Mr. Syrros and Mr. Florakas, who will become partners. It will market its service as “Lixar Fuelled by BDO.”
The acquisition follows a string of purchases by other professional services giants in recent years including McKinsey & Co., Deloitte, Accenture, Boston Consulting and KPMG of AI and data analytics firms as they look to bulk up their capacity to deliver cutting-edge digital insights to their corporate clients.
“All around the world there’s a trend toward this consolidation,” Mr. Keddy said. “There’s a reason it’s happening: Clients are increasingly relying on these types of capabilities – analytics, machine learning and the predictive part of AI – to help their organizations be more competitive.”