RSM McGladrey announced that its $220 million acquisition of American Express Tax and Business Services is a done deal after receiving approval from the Department of Justice.
The transaction means that McGladrey, a business unit of H&R Block Inc., will double its employees to more than 5,000, and generate more than $1 billion in annual revenues. The company has billed the merger, announced Aug. 1, as the creation of the largest U.S. accounting, tax and business services organization focused primarily on the needs of midsized businesses.
"Midsized business owners will now have a national organization dedicated to their particular needs," said RSM McGladrey Business Services president Steve Tait, in a statement. "The middle market represents the most dynamic sector of the American economy."
RSM McGladrey also announced that Jay Brandzel will serve as chief operating officer and oversee a seamless integration of the former TBS business. He served in a similar capacity at TBS and has 30 years of accounting and business services experience. Brandzel will report to Mike Kirley, who oversees RSM McGladrey's traditional services.
Eight offices that were part of the TBS acquisition have transferred to H&R Block. The offices, which primarily prepared tax returns for individuals and small businesses, fit better with H&R Block Small Business Resources and H&R Block Specialty Tax Services, the company said in a statement.
According to Block, during the last quarter the RSM McGladrey Business Services unit posted a 16 percent growth in revenues, marking the eighth straight quarter of double-digit revenue growth. AmEx TBS was established in 1985 and has posted steady growth over the past few years. The firm ranked No. 9 on Accounting Today's 2005 list of Top 100 Firms, with revenues of $385 million. With estimated revenues of $1.05 billion, the combined company will still remain well behind No. 4 firm KPMG (revenues of $4.12 billion), and comfortably in front of No. 6 firm Grant Thornton (revenues of $634 million).
