The partners of Grant Thornton U.K. LLP and RSM Robson Rhodes LLP announced an agreement last week to merge the two firms.Financial terms of the deal, expected to be completed on July 1, were not disclosed. The combined firm will operate under the Grant Thornton name.
The merger will firmly establish Grant Thornton as the U.K.'s fifth-largest accounting and business advisory group based on fee income, approximately $750 million, with over 300 partners and 4,400 staff, operating from 33 locations.
Grant Thornton chief executive Michael Cleary said in a statement that the acquisition of RSM Robson Rhodes will boost the firm's expertise in financial services, property and construction, health and education, and public sector work. Cleary also said that the deal should hopefully position the firm to become a player in the auditing of larger public companies -- an area in which the firm hopes to add an additional $250 million in revenues over the next three years.
According to the Financial Times, RSM Robson Rhodes reportedly lost $750,000 during its 2006 fiscal year and owed some $66 million to creditors based on documents obtained by the paper -- although the paper noted that the figure is not unusually high for an accountant with Robson Rhodes’s turnover. Robson Rhodes was profitable during both 2004 and 2005, but its earnings were dwindling as the firm continued an expansion plan launched in 2003.
Grant Thornton is financing the acquisition through bank loans and contributions from partners.
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