Savant Capital Management, the Rockford, Ill., financial advisory giant that has seen rapid growth in the last few years by switching from organic growth to acquisitions, has made what some might see as a left turn, purchasing a Chicago-area accounting firm serving mainly doctors and dentists.

Savant is buying Green, Plagge & Shaw in St. Charles, Ill., and bringing on principals Chris Plagge and Rene Shaw. GPS, as it’s known, will bring with it a clientele of 130 medical and dental practices. (Savant is also known for its large clientele of doctors.) Savant had $4.2 billion in assets at the end of 2014.

“I think this transaction is pretty unique in our industry,” says Brent Brodeski, who joined Savant founder Thomas Muldowney in 1993, when the two started off in a bungalow house in a residential neighborhood. “It is pretty common for CPA firms to try to get in the RIA business. However, when they do so, investments and planning are typically an afterthought and a sidecar part of their business.”

About 15 years ago, Savant started a “Mayo Clinic” type approach, using teams of specialists and experts to attend to each client rather than one “doctor.” "Purchasing a highly regarded Chicago area tax and accounting firm allows us to add deep tax expertise to better advise our clients and add value to our client relationships that goes well beyond investments,” Brodeski says. The accounting, tax and payroll service allows the firm to expand its holistic approach to wealth management and corporate retirement plans, he says.

The two firms got familiar with each other through shared clients.

Plagge and Shaw said this in a press release: “Having seen Savant at work and having done extensive review and due diligence, we decided that this was the right fit, at the right time.”

The two firms’ work with doctors will allow Savant to differentiate itself, Brodeski says. GPS also brings along accounting and payroll expertise for family office and qualified plan clients.

The deal might look strange to some, since accounting firms are often seen as lower-margin businesses and often more labor intensive (many RIAs are often seen doing a reverse migration out of such work). It might especially seem to cramp the style of Savant, which, after its assimilation of several other firms, including the Monitor Group in 2012, boasted last year that it had margins of almost 40%. (See Financial Advisor’s cover story for September 2014, "Checking Egos At The Door.") But Brodeski says that GPS’s margins are better because of its specialty focus, and furthermore, diversified revenue streams are just what the doctor is ordering in this age of wildly oscillating markets.

“As it pertains to growth, while accounting firms are traditionally known to have smaller margins than RIAs,” he says, “specialized accounting firms like GPS benefit from higher margins. In addition, they provide a revenue stream that is not correlated with stock market cycles. This is a nice complement to RIAs that have far more volatile earnings based on the financial markets.

“Finally,” he says, “all accounting and tax firms are not created equally.  We were attracted to GPS because their culture was very compatible with Savant and because they focus on more highly compensated professionals (physicians, dentists and law practices).”

Besides accounting and tax services, GPS will now be able to offer its physician clients wealth management, financial planning and 401(k) advisory services, he says.

“In a sense, GPS has an oil field of potential investment advisory and 401(k) clients and Savant has a tried and true rig that GPS clients can benefit from,” Brodeski says.

He has said in the past that Savant, as it gets bigger, will have a harder time keeping up with an ideal 15% growth target, and adding services allows the firm to be more aggressive.

“While we have offered tax services for a couple years, acquiring GPS gives us a separate division that can provide this service to our clients,” he says. “We can now more aggressively promote this add-on service. This adds a new revenue stream. In addition, we anticipate increasing the growth rate of our core business by introducing investment advisory and 401(k) services to the GPS client base.”

The money for the purchase comes from Savant’s own war chest—cash from operations, notes and company equity. Brodeski says the firm hasn’t had to turn to its big credit line or outside private equity for its deals, and doesn’t want to. Outside private equity investors are less patient and want to flip their positions more quickly, he said in an interview last year. “The problem with the outside capital is their time frame typically is three to six years. We want to build a sustainable business that’s focused on creating ideal futures for our clients.”

The GPS purchase adds eight professionals to Savant’s ranks. The firm now has well over 100 employees.

GPS also said in a press release that its decision to join was prompted by Savant’s infrastructure. GPS now gets support with compliance, marketing, IT, human resources, tax research and planning, allowing it to focus solely on client service.

Savant and GPS finalized their partnership on December 31. GPS will operate as a subsidiary of Savant Capital Management.