One of the largest accounting firms in the US is in merger talks with RSM Ireland as part of a wider deal for RSM UK in a transaction that could have add to competition in the professional services sector in the Republic.
RSM UK, which acquired RSM Ireland last year and invested some €20 million in the business, confirmed on Friday it is at an advanced stage of negotiations to combine with its larger US sibling firm. The merger remains subject to definitive agreement as well as regulatory and legal approvals.
The deal would create a partner-owned, transatlantic multinational consulting and accounting company with combined annual revenues of $5 billion (€4.6 billion), more able to compete with the Big Four firms EY, KPMG, PwC and Deloitte for mid-market business.
Commenting on the proposed merger, which would incorporate the Irish firm as part of the UK entity, RSM Ireland managing partner Niall May said it would “strengthen” the business. “We’re already seeing the significant benefits of our close relationship with the UK, following their strategic investment in our firm in November 2023,” he said.
Mr May said the prospective deal aligns with RSM Ireland’s focus on being “the advisers of choice to the middle market whilst driving increased competition in the professional services sector” in the Republic.
RSM Ireland began as a start-up in 1987 and it is now ranked as the eighth-largest accounting firm in the country, serving domestic and global midmarket clients, as well as the public and not-for-profit sector. More than 65 per cent of its clients are active globally, according to the firm.
Speaking to the Financial Times on Friday, Rob Donaldson, chief executive of RSM UK, said: “It’s very much a merger. There is no money changing hands. It’s not about generating cost synergies, though there may be some of that. It’s about generating faster growth.”
In a statement, Mr Donaldson said: “We’ve decided to come together to form a unique partnership that goes further to service the needs of our clients as they expand globally, and to create terrific opportunities for our own talent. Now is the time to accelerate our ambitions by drawing on each other’s considerable strengths to become the middle market advisor of choice, globally.”
Brian Becker, managing and chief executive of RSM US, told the newspaper that the deal was not about creating an entity capable of competing with the Big Four but, rather, creating a more “seamless” experience for clients with international operations.
“We’re not trying to be the ‘Big Five’, we’re trying to be the ‘Big One’ to really dominate the middle market,” he said.
The announcement comes just months after The Irish Times confirmed that Grant Thornton Ireland, the fifth-largest accounting firm in the Republic, was working with investment bankers from Deutsche Bank on its future strategy after fielding numerous approaches from private equity firms that are swarming the sector globally.
The Irish entity’s UK sister firm, meanwhile, is reportedly considering a takeover bid from its US affiliate alongside offers from private equity, the Financial Times reported last month.
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