Analysis: Top 10 transformed by merger

The creation of the new firm, which will see the disappearance of the HLB name replaced with ‘Baker Tilly’, sees Horwath Clarke Whitehill squeezed out of the top ten.

The ‘new’ Baker Tilly poses a fresh threat to Tenon, the consolidator, which had built up a fee income of more than Pounds 80m to create the ninth largest firm in the UK.

Baker Tilly, which had dropped to number ten, goes ahead of Tenon once again.

HLB has suffered over the past 18 months.

Attempts to merge with Grant Thornton turned to disaster when it emerged that many of HLB’s smaller offices were not intended for inclusion.

Since the collapse of that deal HLB has struggled to build its business and rationalise through the sale of peripheral offices.

At the end of last year, rumours began to circulate that the merger with Baker Tilly had roused dissent among HLB partners especially in London, HLB’s largest office.

But HLB managing partner Ray Greatorex remained confident he would have support for the merger. He needed 75% of the 141 partners to back the merger proposal and sources say he was backed by more than 90% with just a few isolated rejectionists.

Further consolidation of the mid-tier had been long expected by many in the profession.

Gareth Pearce, chairman of mid-tier firm Smith & Williamson, told Accountancy Age.com in September that it had to happen.

He said: ‘I see some of the medium-tier names, perhaps all of them from six to fifteen [on the Accountancy Age Top 50] involved in another bout of mergers.

‘When it will happen I do not know.’

He added: ‘There is one hell of a dance going on at the moment. All the firms are talking to each other all the time.