The managing director of accounting network MHA has signalled his intention to pursue further mergers following a flurry of recent deals within the profession, as mid-tier firms aggressively compete for market position.
The Current Merger Landscape
Andrew Griggs, senior partner and managing director at MHA, told Financial News that his firm remains actively engaged in seeking additional merger opportunities. This comes amid what industry observers are describing as an unprecedented period of consolidation within the UK accountancy sector.
MHA, which is the UK member of international accounting network Baker Tilly International, recently completed its own significant merger with Knill James Chartered Accountants in April. This strategic move added approximately 50 staff members to MHA's existing workforce and strengthened its presence in the Home Counties market.
The accountancy profession is witnessing what many are calling a 'merger rush' as firms seek to achieve greater scale, expand their service offerings, and compete more effectively against both the Big Four accounting giants and smaller, specialised practices.
Drivers Behind the Consolidation Trend
Several key factors are fuelling this wave of mergers and acquisitions within the professional services sector. Increasing regulatory pressures and the growing complexity of compliance requirements are pushing firms toward consolidation to spread costs across larger organisations.
Additionally, the competitive landscape has intensified significantly. Mid-tier firms like MHA find themselves squeezed between the global reach of the Big Four - PwC, Deloitte, EY, and KPMG - and nimble smaller practices that can offer more personalised services at competitive rates.
Technology investment represents another crucial driver. The substantial costs associated with implementing advanced digital tools, AI capabilities, and cybersecurity measures are becoming increasingly difficult for smaller firms to bear independently, making merger an attractive option for accessing these resources.
Strategic Implications and Future Outlook
Griggs' comments highlight a strategic recognition that standing still is not an option in today's rapidly evolving professional services market. The merger with Knill James provided MHA with not just additional staff but also valuable expertise and an expanded client portfolio.
Industry analysts suggest that this consolidation trend is likely to continue throughout 2024 and beyond, with numerous firms currently engaged in behind-the-scenes discussions about potential partnerships and mergers.
The ultimate beneficiaries of this consolidation wave may well be clients, who can access a broader range of services and more sophisticated technological capabilities from their accounting providers. However, some market watchers caution that the cultural integration challenges following mergers should not be underestimated.
As the accountancy sector continues to transform, the strategic moves made by firms like MHA today will likely define the competitive landscape of the profession for years to come.
