Is joined-up thinking dead and buried?
Has accountancy’s consolidation game played itself out?
The flurry of M&A activity, which kicked off soon after the turn of the
millennium, has slowed lately but last week’s news that Vantis has received an
approach sent the pulses of those who care about this sort of thing racing.
If,as market rumours have suggested in the last few days, it is fellow
consolidator Tenon that has made the approach, it will be a remarkable turn of
events.
A US phenomenon, consolidators have only been active on this side of the pond
since 2001.Yet their wildly changing fortunes have ensured acres of news
coverage.
Numerica was the first on the UK scene and thrived initially, foundered until
it was finally bought out by Vantis.
Tenon has enjoyed and endured similar highs and lows but is emerging as the
sector’s great survivor. Especially if it succeeds in its apparent pursuit of
Vantis.
Is it a prize worth winning? Certainly. The revenues of a combined
Tenon-Vantis would top the symbolic £200m mark and thrust the firm into the
Accountancy Age Top 50’s top ten.
But it will mean the death of the consolidator model, though some say that
dream died some time ago.
If Tenon keeps acquiring it will be just another firm on a buying spree.If
another consolidator emerges it’s hard to imagine it gaining momentum.
Even if it were to achieve the impossible and acquire all the independent
practices in the UK,it may match the Big Four by revenues but it would never be
a truly integrated rival.
As one mid-tier senior partner said this week: ‘If all the corner shops in
the country merged they would be as big as Tesco – but they still wouldn’t be
Tesco.
’That’s not just a challenge for consolidators – but all the mid-tier.