PracticeAccounting FirmsIt’s an acquisition but not as we know it

It’s an acquisition but not as we know it

MCR approached US-based financial advisers rather than accountancy or insolvency firms to grow its presence

MCR’S SALE to a large US firm may have come as a surprise to many, but as an independent firm trying to expand its horizons the deal was a no-brainer.

In October, Top 25 firm MCR revealed US financial advisory business Duff & Phelps had bought the firm for an undisclosed sum.

Until now, MCR was one of only ten firms in the Top 50+50 survey that was not part of an international firm or network.

As an insolvency-only firm, the news that MCR was aligning itself with an international player, with priorities outside company collapses, may have seemed unusual. But to managing partner Andrew Stoneman, the deal made perfect sense, as the firm seeks to broaden its remit and decided it wanted to “penetrate North America”.

Members of the team made numerous trips to New York, where the firm planned to establish its next office, but after several months trying to build a contact base, it became clear that MCR would need a bigger brand if it wanted to work on the other side of the Atlantic.

It’s a tougher market in New York, explains Stoneman and Duff & Phelps’ brand held weight.

Ducking the easy option

The easy option would have been for MCR to join an association or set up a strategic partnership, but finding an owner that would give it a brand presence proved difficult to achieve.

Meanwhile, Duff & Phelps was trying to move into the insolvency market, which had seen it buy a restructuring company in Los Angeles and Ernst & Young’s Paris-based restructuring arm.

But, if an insolvency firm wanted brand leverage why not merge into a larger accountancy firm?

duff-phelps-2

An acquisition with an accountancy firm raised several conflicts concerns, mainly in the likelihood of them previously serving as their auditor – or from other service lines.

Ball rolling

Initially approached by MCR, Duff moved quickly – having only met MCR’s board in May.

MCR’s partnership will be dissolved in a matter of weeks. All partners are now Duff employees with all previous liabilities, equity and taxes paid off. The firm will also rebrand to Duff & Phelps early next year.

Stoneman concedes that joining a large organisation means an inevitable increase in bureaucracy and red tape, but the pros far outweigh the cons.

Current and new staff will have access to secondments all over the world and the increase in resources has added to the tool box of skills needed by the firm.

“Prior to Halloween we were an independent firm in control of our destiny. We didn’t want an acquisition that would change our culture, but we feel this move will enhance that culture and contribute to our business,” said Clark.

Although a big shift for the three-office firm, this new alignment should stand both MCR and Duff & Phelps in good stead to become a serious contender against the Big Four in large corporate collapses – especially those that involve cross-border insolvency.

 Image credit: Shutterstock

 

Related Articles

Smith & Williamson and Rathbones merger talks end

Accounting Firms Smith & Williamson and Rathbones merger talks end

4m Alia Shoaib, Reporter
Tilney and Rathbones in bidding war over Smith & Williamson merger

Accounting Firms Tilney and Rathbones in bidding war over Smith & Williamson merger

4m Alia Shoaib, Reporter
Deloitte acquires Swedish digital agency Acne

Accounting Firms Deloitte acquires Swedish digital agency Acne

4m Alia Shoaib, Reporter
Hall Livesey Brown merges with Colin F Whitfield & Co

Accounting Firms Hall Livesey Brown merges with Colin F Whitfield & Co

1y Richard Crump, Writer
2020CA Ltd joins Beavis Morgan to form BM2020

Accounting Firms 2020CA Ltd joins Beavis Morgan to form BM2020

1y Stephanie Wix, Writer
Mercer and Hole merges with Rickmansworth office of Day, Smith and Hunter

Accounting Firms Mercer and Hole merges with Rickmansworth office of Day, Smith and Hunter

1y Richard Crump, Writer
PwC acquires data technology firm Selera Labs

Accounting Firms PwC acquires data technology firm Selera Labs

1y Richard Crump, Writer
Baldwins acquires accountancy practices in Shropshire and Gloucestershire

Accounting Firms Baldwins acquires accountancy practices in Shropshire and Gloucestershire

1y Richard Crump, Writer