BDO’s UK wing is in advanced merger discussions with BDO Ireland. The move is subject to a partner vote – but could create a combined firm of more than 8,000 staff.
Amid a sustained slowdown in demand, the UK consulting market is looking to shore up its financial performance in a number of ways. While rounds of cost-cutting and headcount trimming typically generate more headlines, they may also leave a company short-staffed, should the economy turn a corner – so consolidation via mergers and acquisitions is also proving a popular method, especially involving firms with access to both the EU and UK markets.
This has made the island of Ireland increasingly popular. MHA and Roberts Nathan recently relaunched as Baker Tilly Ireland, for example, while Moore Kingston Smith expanded into Ireland with its purchase of Irish accounting and advisory firm Moore – part of the same international network.
Now, BDO’s UK network member is poised to merge with its Irish sister firm, as it positions itself for its own regional consolidation. BDO has confirmed its two firms are concluding discussions, and awaiting a partner vote and regulatory approval.
Like many peers – including the previously mentioned Moore – BDO is a network of partnerships that are separately owned and managed by the senior practitioners in each country, overseen by a global umbrella body. BDO’s combined UK and Ireland business would have annual revenues close to £1.1 billion, and combine the Irish offices in Dublin and Limerick with the UK firm’s 18 sites – with 542 partners and 8,500 employees. On completion, the group will remain within the BDO International network, which has almost 120,000 staff in 1,800 offices.
Brian McEnery, managing partner at BDO Ireland, called it a “logical step”. Meanwhile, Mark Shaw, managing partner at BDO UK, added that it would “make sense that we look at ways to collaborate even more closely with our international colleagues, hence this proposed merger.”
Mid-tier and smaller consulting firms are increasingly also looking to fortify their position by taking on external investment. An informal group of senior partners is currently understood to be conducting research for BDO’s global umbrella body on taking external investment, including selling stakes to private equity investors, but the firm does not currently have this kind of backing for its own international merger campaign.
Elsewhere, BDO’s mid-tier rival Grant Thornton sold a stake in its UK business to Cinven last year – and has since used the investment to bid for stakes in its German and Singaporean sister firms. Charting a potential course ahead, this deal was followed by a number of other private equity entries into the consulting sector, including AAB and Mace Consult both taking on funding from Goldman Sachs.