Baker Tilly believed it missed out more than a year ago when HLB Kidsons, the firm it merged with this week, announced it was to join Grant Thornton.
The GT deal fell apart after months of negotiations but Kidsons and Baker Tilly celebrated this week after going public on a merger that will create a £150m firm with almost 300 partners to become the eighth biggest in the country.
The merger transforms the mid-tier landscape throwing Horwath Clark Whitehill out of the top ten and pushing consolidator Tenon and PKF down a place in the rankings.
Continuing under the Baker Tilly brand, the new firm sees the end of the Kidsons name which had been in use since 1875. Senior figures insist the adoption of Baker Tilly and the loss of Kidsons was an easy decision made early on in the negotiations.
Laurence Longe, of Baker Tilly, will continue as national managing partner of the new firm, while Ray Greatorex, former national managing partner of Kidsons, will take up the new post of executive chairman.
Reflecting on Kidsons’ near miss with GT, Longe said: ‘From our perspective at that time it was a missed opportunity. A missed opportunity for both businesses, that is apparent now.’
Longe believes Kidsons brings long needed representation for the firm across the Midlands and the north of the country, while HLB gains the benefit of a strengthened position in London and the South East from the deal.
The merger will appear as a triumph for Greatorex who had worked hard to transform Kidsons in the wake of the failed attempt to merge with GT.
When GT negotiations collapsed, Greatorex made public his view that Kidsons was out of the market for a national merger. However the Baker Tilly opportunity was too good to miss.
‘As it happened, the changes had a quicker effect that might have been the case. We were merger-ready,’ said Greatorex.
The merger also creates the eleventh largest international network with turnover of around £830m ($1.2bn).
Efforts will now concentrate on integration with IT being one of the key target areas so that the new firm’s 2,000 employees will be able to talk to each other.
PKF this week said the merger gave it one less firm to compete with.
John Wosner, PKF chairman, said: ‘I don’t think it’s going to have a dramatic effect on our market share in our niche products.’