The new firm, which will use the Grant Thornton name, will have a combined fee income of £230m and some 375 partners, making it the sixth largest UK firm ahead of BDO Stoy Hayward.
The announcement continues a new wave of ‘merger mania’ as it followed news of a merger between Baker Tilly and Fraser Russell in a move that will create a £70m national practice.
Grant Thornton’s national managing partner David McDonnell said the merger with Kidsons would provide further leverage Grant Thornton’s services within the owner-managed business and corporate finance markets.
McDonnell said that within the mid-tier itself there were relatively few candidates for merger. Only three or four firms in the mid-tier have the right business model to compete nationally. Firms need to operate as single national partnerships in order to deliver a consistent branded service and to be able invest nationally, he said.
HLB Kidson’s national managing partner Ray Greatorex agreed: ‘Both firms have a compatible approach to client delivery -through a single national partnership structure. Few other firms have adopted this approach.’
‘HLB Kidsons set out clearly its vision of being the business partner of choice to the SME sector in its three-year development plan, which we announced last year. A merger with Grant Thornton will allow us to achieve many of our objectives more rapidly and strengthen our regional network,’ he went on.
The firms will now enter a consultation period and aim to reach agreement with partners by September with a target date of 1 January next year for implementation of the merger.
McDonnell said that these moves were unlikely to be the only consolidation in the mid-tier. ‘Most of these firms are neither fish nor fowl. They are neither small enough with a low-cost structure to be cost effective against the smaller players, but nor do they have the characteristics of critical mass,’ he said.
At Baker Tilly, meanwhile, national managing partner Laurence Long said that some job losses and office closures would occur as the firms consolidated their 1,000 and 200 strong staff.
The new group, which will retain the Baker Tilly name, will be the ninth largest accountancy practice in the UK – based on fee income figures in last year’s Accountancy Age top 50 survey to be updated next month.
Chairman Clive Parrit said that the link-up would give both parties the ‘critical mass’ needed to hit ‘bullish’ objectives.
‘Baker Tilly will emerge as a middle-tier star – key positioning in a large and volatile market’, Parrit said.
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