Xenia Taliotis 5 Oct 2017 09:30am

Making the parts a greater whole

John Connolly, the former chief executive of Deloitte, made the news last autumn when plans of his venture with private equity house HgCapital were announced. A press release stated that Connolly’s CogitalGroup would expand its business mainly through acquisitions, starting with Blick Rothenburg, Visma BPO and Baldwins. This drew attention to the importance of mergers and acquisitions (M&As) for accountancy firms as a fast and efficient way to expand

Caption: Illustration by Jordon Cheung

Simon Gallagher, managing partner at Moore Stephens, which merged with Chantry Vellacott in May 2015, says M&As are now a critical part of its growth model and an effective way of bringing in new service lines and talent. “Our merger with CV is a partnership of equals – we’re a true team, one that shares all skills, knowledge and rewards. That was crucial for us, and for them.”

Though Moore Stephens was the bigger team – 550 to Chantry Vellacott’s 275 – the union has proved equally beneficial. “Our fee income is now over £100m, up £20m on our joint revenues before the merger,” says Gallagher. “It was a textbook merger – we were searching for opportunities at exactly the same time as CV was, and we were fortunate that our mutual aims aligned completely.

“It’s likely that we’ll continue growing in this way subject to the right opportunities being present, and we’ve recently completed on the merger with JBA, the actuarial services firm. This approach is not unique within the UK. The Moore Stephens International network is represented in more than 100 countries, many of which have seen strong M&A growth opportunities recently.”

Delia Orme, a sole practitioner employing six staff, joined Alliotts in April. The move, she says, was brought about by the realisation that the needs of her clients could be better met within a larger practice. “Some of my clients had reached the point where they were looking to expand abroad, and I had limited access to international business connections. Plus, I knew even when I started my practice 18 years ago that I would need an exit strategy at some stage, and so I had a plan. When I was approached by Alliotts it seemed an ideal opportunity to take that leap.”

Orme admits that the transition away from being the sole boss was not easy and there have been challenges along the way, including an emotional response to letting go. “On balance, it’s all gone very smoothly, and I think my team and I have integrated well, but obviously we’re working with another firm’s systems and admin functions, so there is a lot to learn.”

She feels that Alliotts was drawn to her because her business would add to the firm’s, with no overlap. “They came to us because of our specialist expertise. My firm was a niche tax consultancy, with probate and wills experience and had an excellent portfolio of private clients. It was a good fit.”

At the other end of the scale, BDO has, since 2010, added another 52 countries and territories to its global footprint, taking the total to 162. Global CEO Martin van Roekel says the drive for expansion has been accelerated by a desire to deliver exceptional client service: suitable partners are found partly with the help of existing BDO firms, partly through market research, and partly as a result of unsolicited applications from practices wishing to join.

“Selected candidate firms provide us with a profile that we scrutinise forensically before agreeing to meetings,” says van Roekel. “Our aim is to gain an understanding of the firm’s strengths and weaknesses. We always look for a true partnership, even when we are in acquisition mode, and base our selection on the firm’s ownership and governance structure, its market position, ambition and culture. Only if our relatively stringent criteria are met will the candidate be admitted as a member firm of the BDO network.”

BDO’s plans include further expansion of its global coverage – but at a slower pace – and ongoing M&As at local level. The reality, says van Roekel, is that although many firms will have M&A as part of their growth strategy, only the larger networks will be able to invest sufficiently. “In my opinion, smaller firms and networks will not have the capacity, so M&A opportunities will increasingly revolve around practices such as ours.”


If you’re looking to merge with a larger firm, make sure you are clear about your USP. Think how your expertise, clients and staff will help the firm you’re joining – and negotiate hard for the best terms.

If you’re joining a larger practice, be prepared to adapt. Even the smoothest M&As result in huge upheaval. It also takes time to change from being the boss to being one of many partners.

Do your research thoroughly to decide if you like the new people you’ll be working closely with. Don’t proceed if you have any doubts. Subjects to address include whether your growth ambitions are aligned with those of the other partners, and what your views are on investing in quality and staff.

Be clear and transparent in your expectations, and in finding out what is expected of you. Be extremely careful in accepting compromises.

Work hard at pulling the best out of both parties and their staff. Talk to people and listen to what they say. Is there anything you could be doing better to bring about full integration?


Plan ahead. Make a list of potential firms and conduct due diligence on their areas of practice and their clients. A merger should bring new expertise, not double up on existing specialisms.

For a true partnership, you must understand the culture of the firm you are merging with. Both parties should get to know each other’s leadership and governance strategy, their market position, ethos, ambition and what drives them.

Mid-tier practices wanting growth through M&A must be clear what type of M&A they require. There must be a well-defined, all-inclusive process in place and the leading partners need to be convinced that the culture of their firms is aligned and that all staff support the M&A intention.

Merging IT functions is often the most challenging aspect of bringing practices together, so dedicate resources to planning and ensuring this runs smoothly.

Communicate. Bring everyone into the loop as soon as you can. Everything starts off being confidential, but once you’re through that phase let everyone know what’s happening. People will wonder what will happen to their job and who their manager will be, if they will need to relocate…