• BDO UK: BDO merging with Moore Stephens
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BDO UK: BDO merging with Moore Stephens

29 November 2018

BDO set to become UK’s fifth-largest accountancy firm.

BDO has set its sights on auditing the biggest listed clients in the UK after merging with UK competitor Moore Stephens in a transformative deal that will shake up the competitive landscape in Britain’s audit market.

It has been in discussions for months over merging its operations with part of Moore Stephens, which has a large London business and satellite offices throughout the UK.

In a move designed to create a fifth firm capable of advising FTSE 100 firms, the new business would be larger than Grant Thornton.

The new firm will be the leader in advising the UK’s entrepreneurial mid-sized businesses but will also challenge its larger competitors for more complex audit, tax and advisory work.   

It will also strengthen BDO’s expertise in a number of lucrative areas, including financial services, insurance, shipping and public sector clients.

On completion of the deal – expected spring 2019 – the combined firm will have gross annual revenue of £590m delivered by 5,000 people across the UK. The firm will take on the BDO brand, as it will remain part of BDO globally, the largest mid-tier accountancy organisation in the world with revenues of over $8billion and operating in 162 countries.

Simon Gallagher and Jon Randall, the current managing partner and chief operating officer of Moore Stephens, will join the board of BDO.

Paul Eagland, Managing Partner, BDO, said:

“If ever there were a time for firms to turbo-charge their growth, it’s now. As a combined firm, we offer greater choice, competition and scalability to the top-end of the market, and are better placed to deal with any economic disturbance from Brexit.

It was clear from our first meeting that we share similar culture and values. As professional services firms, our people are our greatest asset and it is essential that we create an enlarged business that retains the best of our similar cultures. Both firms are full of innovative people who are experts in their field – this will continue.  

BDO is in a great position in the market, both in the UK and across the world as part of an $8bn BDO global organisation. In the last 12 months – in the wake of Carillion and the subsequent focus on competition in the audit market – the UK market now has a better appreciation of BDO’s capability and quality. This deal increases our credibility further and proves our commitment to competing in the top-end of the market.

But we’ve always said that size isn’t a proxy for quality. A driver of this merger is one of sustainable and profitable growth that benefits our clients, people and capital markets alike.”

The two firms operate in very similar sectors: energy, technology, retail, real estate, financial services and more.  Moore Stephens is also very strong in the shipping, insurance and donor assurance sectors.

 

Simon Gallagher, Managing Partner, Moore Stephens LLP, said:

“To be entering final discussions to create the largest UK accountancy firm focused on entrepreneurially-spirited and fast-growing businesses is exciting – and critical for market competition. The proposed merger provides a platform for continued, sustainable growth, as well as offering something different to the market at this important time."