Downturn may trigger accountancy takeover flurry

Tony Stockdale, RSM Bentley Jennison's national managing partner

The merger and acquisition market may have stalled amid the economic downturn, but the accountancy sector could experience some consolidation of small and mid-sized firms.

RSM Bentley Jennison, the acquisitive top 20 firm, will likely be among the buyers this year.

In 2004 the firm undertook a merger with Moore Stephens in Birmingham, and acquired BMF group in Milton Keynes, and WBS in Leeds and Harrogate in the same year. Last year it took on the remnants of collapsed firm Wenham Major.

Tony Stockdale, the firm’s national managing partner told Accountancy Age that the firm is currently involved in a number of deals, but he declined to give more details.

‘We’re looking to strengthen our business both at a divisional level and overall,’ he said. ‘The focus is on London and the south east.’

Stockdale said smaller firms were increasingly interested in joining the firm, and said this was a direct consequence of the downturn.

‘Clearly the simple analysis is that it’s a buyer’s market and therefore the prices are lower, but it’s not as simple as that ­ if you pay peanuts you get monkeys. Good quality people are good quality people in any market,’ he said.

The last recession in the 1990s saw a spate of mergers in the accountancy profession, but John Whiting, tax partner at PricewaterhouseCoopers, said it was too early to predict whether the current downturn would follow a similar pattern.

‘Some firms back then found that what had been a particular level of expertise and work wasn’t drying up, it was just much less available, and it made sense to get together with others who could use the resources if the two firms were complimentary,’ he said.

Whiting said that during the last recession, firms waited until the full affects of the downturn were realised before engaging in any consolidation activity.

‘The early 90s was the first time accountancy had been affected by [an economic] downturn. It was a wake-up call and a revelation. People waited for impacts to become apparent,’ he said.