RSM McGladrey buys UK partner
NEW YORK (Reuters) - RSM McGladrey Inc., one of the biggest global accounting firms after the "Big Four" firms, agreed on Tuesday to purchase its British accounting partner, RSM Robson Rhodes, to boost its competitiveness with larger firms in the United Kingdom.
The terms of the deal were not disclosed and the deal excludes RSM Robson's auditing attestation business.
RSM McGladrey, an indirect subsidiary of H&R Block Inc. (HRB.N), said it was purchasing the London-based firm, to improve the international aspects of its accounting, tax and business consulting work for mid-sized companies. Robson said the deal would also improve the company's access to capital.
"Through this we effectively create one organization," said Steve Tait, president of RSM McGladrey in an interview with Reuters. "We're trying to create a very compelling alternative to the 'Big Four' in the UK. We know the economy at large needs a serious alternative to the 'Big Four' to emerge and we're trying to be that."
The "Big Four" firms, which include Deloitte & Touche DLTE.UL, Ernst & Young ERNY.UL, PricewaterhouseCoopers PWC.UL and KPMG KPMG.UL, audit about 80 percent of all the public companies in the United States. An August British government report said the "Big Four" audit about 97 percent of the FTSE 350. They also tend to dominate the global tax and advisory consulting services markets, although corporate reforms in the United States have restricted their ability to provide certain advisory services to companies they audit.
The RSM deal is unique as accounting firms are typically run through a partnership structure, where each partnership is owned in the country where it is based and affiliated with a larger global network.
"This is the first time that there has been a U.S. to U.K. tie up that officially creates one-managed, one-owned integrated business," Tait said. "Networks only go so far, but integration can go a lot further."
The combined firm will remain an affiliate of the RSM International network. RSM Robson has nine offices throughout the U.K. and Ireland.
