Recession will re-ignite the merger market
M&A departments may have found themselves a little inactive of late but for UK accountancy firms, 2009 could well usher in a flurry of merger and acquisition activity after a relatively quiet few years
The acquisitive Tony Stockdale, of RSM Bentley Jennison, is by no means alone
in window shopping.
‘We’re looking to strengthen our business both at a divisional level and
overall,’ he says. Many others who can afford it will feel the same.
Just as some of the flusher private equity groups are providing funds for
buying up distressed corporates, many forward-looking firms are on the hunt for
cheap assets among UK practices. Practice M&A activity climbed in the last
recession and it will do so again this time around.
It is a buyer’s market and there are too many practices that need to sell.
At Accountancy Age we’ve written repeatedly of the hundreds of
partners at smaller firms who are looking to cash in on decades of goodwill they
have built up. Unfortunately the forecasts that they might find it tough are
if anything proving to be an understatement.
That’s the smaller end of the market. What of the big boys? There is plenty
of room for consolidation among the upper and lower ranks of the mid-tier,
though ego and sizeable pension pots always make deals hard to seal.
And in times of crisis a mega deal can never be ruled out either. Again as
history has proved, it’s easier to convince a regulator that a merger of serious
players should be permitted when markets are in the doldrums.
In 2009 it could happen.