PracticePeople In PracticeLeader: More dirty work ahead in RSM Tenon deal

Leader: More dirty work ahead in RSM Tenon deal

Even if the pre-pack leaves a 'tidier' RSM Tenon, bringing a distressed firm on board is fraught with problems, suggests Kevin Red

Leader: More dirty work ahead in RSM Tenon deal

IS RSM TENON a good business?

Obviously Baker Tilly thinks so. Or at least one with potential.

Without having to carry RSM Tenon’s full Lloyds debt burden on its own books, on the face of it the deal becomes more compelling. Indeed, the RSM Tenon executives have led a big restructuring at the business which saw it entering a period of relative operational stability.

It will be interesting to see whether RSM Tenon CEO Chris Merry considers the deal a ‘success’. It will certainly secure many people’s jobs, but won’t look too hot on his CV.

Let’s not forget the long-suffering shareholders who are out of pocket.

While Merry and the other directors were unable to reconcile the debt issue with Lloyds, Baker Tilly has been able to swoop in. As Merry said to Accountancy Age on his appointment last year, “a people business is about confidence”. Many of their partners, shareholders and financiers lost confidence.

And there is more dirty work to do, which will fall into Baker Tilly’s lap.

RSM Tenon has been haemorrhaging partners, and Baker Tilly’s intervention doesn’t mean that process will end. Indeed, it will want to see if anyone’s hanging around that needs ‘retiring’. And the cost of pushing people out of the door, looking at office mergers and bringing together back-office functions and systems is painful.

Ask Grant Thornton about its post-RSM Robson Rhodes shenanigans.

And, speaking of RSM, the international network faces another search for a UK incumbent.

UK mid-tier firms face succession planning issues, a stagnant market with too many players, plus big and small firms encroaching into their space.

It has been predicted for many years, but now the time has come for change. The BDO/PKF and Baker Tilly/RSM Tenon deals will not be the last.

Firms will live, and firms will die. But at least things will be different.

Kevin Reed is editor of Accountancy Age and Financial Director

Related Articles

ICAEW president: We must adapt to add to our heritage

Accounting Standards ICAEW president: We must adapt to add to our heritage

1y Richard Crump, Writer
Champion Accountants agrees Southport office MBO

Accounting Firms Champion Accountants agrees Southport office MBO

1y Richard Crump, Writer
Social pressures from management causes accounting fraud, research claims

Management Social pressures from management causes accounting fraud, research claims

1y Fraser Simpson, Reporter
AAYP: Online accounting qualifications - a smart option for employers and staff

Management AAYP: Online accounting qualifications - a smart option for employers and staff

1y Acccountancy Age
AAYP 2016: The new breed of accountant

Accounting Standards AAYP 2016: The new breed of accountant

1y Acccountancy Age
Best Practice: Saffery Champness managing partner Rob Elliott

Accounting Firms Best Practice: Saffery Champness managing partner Rob Elliott

1y Calum Fuller, Reporter
Best Practice: Wilson Wright’s Michael Lerner

Accounting Firms Best Practice: Wilson Wright’s Michael Lerner

1y Fraser Simpson, Reporter
Enter the British Accountancy Awards 2016

Accounting Firms Enter the British Accountancy Awards 2016

1y Richard Crump, Writer