Five of Perth’s mid-tier accounting firms have changed their name and/or their affiliation in the past six months, representing an unprecedented period of restructuring for the sector.
Five of Perth’s mid-tier accounting firms have changed their name and/or their affiliation in the past six months, representing an unprecedented period of restructuring for the sector.
In the latest deal, announced last week, Subiaco firm Maxim Business Consulting Group joined the national Hall Chadwick group.
For two years the local firm has filled the Western Australian gap in Hall Chadwick’s national network.
It followed last month’s decision by Bentleys MRI Perth’s partners to become part of the Grant Thornton network.
That, in turn, followed a decision by Grant Thornton’s Perth partners to sell their practice to listed company WHK Group Ltd for $7.2 million, and to start trading as WHK Horwath.
The opportunity to take the Horwath name arose because the partners of BDO and the old Horwath decided earlier this year to merge and trade as BDO Kendalls.
The motivation for each of these deals is varied, but collectively this period of musical chairs is sure to have left many clients confused.
The challenge for the accounting firms is to demonstrate that their new affiliations are an improvement on the old.
Maxim was established in 2000 after its current directors, Gino Terriaca and Mark Lester, merged their former practices. They are hoping the affiliation with Hall Chadwick will enhance their opportunities.
“We’ve now grown to the point where we feel a national affiliation will give us some advantages,” Mr Lester told WA Business News.
Their firm currently has three partners and 20 staff, and they are aiming to expand to 35 to 40 staff over the next two to three years.
Like all accounting firms in Perth, their growth has been constrained by the shortage of experienced staff in the market, and they are hoping the Hall Chadwick link will assist in recruitment and staff development.
“We wanted to give our staff the opportunity to relocate and at the same time attract people here to Perth,” Mr Lester said.
“So there will definitely be a cross-flow of ideas, people and resources.”
Maxim’s move comes two years after the Hall Chadwick name disappeared from Perth.
Its insolvency partners left the group in 2005 to establish SimsPartners and soon after its audit partners merged with the old Bentleys MRI.
It also comes five years after Hall Chadwick and MGI Bridge Partners abandoned a short-lived merger.
Mr Terriaca said the group was keen to expand in the corporate services area, through investigating accountants’ reports, due diligence services and corporate advisory.
Maxim also wanted to strengthen its audit practice, which currently has two audit partners.
Mr Terriaca said the deal was structured so that Maxim would remain totally independent financially.
“We wanted to retain our independence but have a strong national brand and share resources,” he said.
Other groups have moved towards a more closely integrated federation and in some cases full financial integration.
Perth-based RSM Bird Cameron, which is the largest accounting firm in Western Australia outside the ‘big four’, runs a fully integrated national practice.
WHK also runs an integrated practice, which Perth partner Geoff Kidd believes is one of its strengths.
The group’s annual report disclosed that it paid $7.2 million for Grant Thornton Perth, making it one of the group’s largest acquisitions.
WHK’s business services arm completed 23 acquisitions last year, and increased its sales revenue to $217 million.
Grant Thornton is also in the process of moving from a federation to an integrated national partnership.
Perth director Cam Ansell said a loose federation offered some advantages in terms of autonomy but also left the risk that members firms could leave.
“I also think clients are becoming more sophisticated and recognise the benefits of seamless, consistent representation around the country,” he said.
“That is difficult to deliver through a loose federation.”
