The merger of two major accountancy firms is the first of its kind in 15 years, according to the firm's new lead partner in the West Midlands.
The deal to merge BDO and PKF was struck last week with the entire 70-strong PKF West Midland team moving across to create an office employing 250 people in the region under the BDO brand.
Lead partner Mark Anslow said that while consolidation had been commonplace in financial services, not since PricewaterhouseCoopers in 1998 had two major business services firms come together for growth reasons.
Mr Anslow said the deal took forward plans to grow in the region by focusing on key sectors – PKF’s strength in the medical and not-for-profit sectors locally will augment BDO’s expertise in manufacturing and real estate.
Speaking to the Post after the deal was agreed, Mr Anslow said cost-cutting was not a major factor in the merger, which created a £400 million turnover UK-wide business, and he was confident it was a good time to come together.
“This is the first time in 15 years that there has been what I’d call a proper merger,” he said. “The last one was probably PricewaterhouseCoopers.
“There have been mergers because of outside pressures like Robson Rhodes, which was going to go bust and was bailed out. This is two businesses, one doing £300 million a year and the other doing £200 million, which are both lean and profitable, which have a strategy in a market that needs to consolidate.
“With one or two minor exceptions it is not a cost issue, it is a growth plan. And I think the market is an exciting place to be now.”
The new company has 24 office locations in the UK and more than 3,500 employees.
Mr Anslow said some back office functions would be merged, with some job losses, but that had not been an aim of the merger as growth was the agenda.
Professional staff, PAs and secretarial employees have been told that there will be no reduction in headcount.
Mr Anslow said the addition of PKF’s strong medical practice – headed up by partner Sarah Moss in Birmingham – was a major boost.
He said: “We want to have seven or eight things that we are going to do very well. If we are going to do it, we want to be good at it.
“BDO is already the best in manufacturing and real estate, and now we are the best at medical as well.
“That turns over £1 million locally and Sarah has the chair role of the national medical team which turns over £8 million.”
Mr Anslow said in the face of a tough climate in the transactional market BDO has had success locally through keeping and growing corporate clients.
He said while some rivals had axed their mergers and acquisitions teams in light of the tough economic climate, BDO had kept its team strong, and he was hopeful that would pay off in the medium-term.