RSM UK and US at heart of creation of $5 billion combined firm

22 October 2024 Consultancy.uk

Global professional services network RSM has announced plans to merge its two largest member firms. Together, RSM UK and RSM US propose to establish a partner-owned, multinational organisation dedicated to delivering quality, globally integrated services for the transatlantic mid-market.

For decades, the professional services world has been dominated by the Big Four of PwC, EY, KPMG and Deloitte. The size and scale of the firms means that they have been able to easily hoover up audit and advisory contracts with the largest clients in almost every market – leaving the chasing pack of ‘mid-market’ firms squabbling for the proverbial scraps.

In recent years, however, a number of accounting scandals and increased regulatory scrutiny have seen the Big Four re-evaluate their position in the market, and ‘de-risk’ their portfolio by withdrawing from a number of medium-sized (but still lucrative clients). This has offered up an opportunity to challenge their dominance – one which a proposed plan from RSM could be aiming to make the most of.

A combination of RSM US and RSM UK – the network’s two largest member firms – could see the creation of a combined entity of more than 23,000 professionals and revenues exceeding $5 billion revenue. The creation of such a mid-market powerhouse means the company could provide comprehensive services for clients needing consistent cross-border support, helping it to win bigger contracts with more prestigious clients.

Brian Becker, managing partner and CEO, RSM US, commented, “Our clients have long desired to be served by a financially integrated transatlantic organisation. This merger will create a platform to more effectively serve client needs with quality services and more seamless access to our resources. We are doubling down on our future as a dynamic, partner-owned platform, at a time when the industry is undergoing transformation.”

According to Becker, the US and UK arms of RSM have “a deep and long-standing relationship”, and joining forces will help “drive value for the firm’s clients, owners, employees and the entire RSM International network.” At the same time, he added the new combined firm is “well capitalised to continue investing” in its growth and the advancement of RSM’s wider 2030 global strategy.

Rob Donaldson, CEO of RSM UK, meanwhile suggested that the move could help RSM UK build on its own bullish growth in revenue and profits, having “repositioned the firm over the last four years.” Joining together with the US – as well as RSM’s sister firms in Ireland, Canada, El Salvador and India – is the “next logical step” on that journey.

Donaldson explained, “We already have strong bonds with our transatlantic colleagues and work together with a common aim, to be leading advisors to the middle market. 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.”

The proposed merger is remains subject to further discussions and agreement on definitive terms. However, it is expected that the alliance will produce “a partner-owned multinational organisation” spanning three continents.

Niall May, RSM Ireland’s managing partner, believes such a move would also boost the Irish business. Speaking to the Financial Times, he explained that it would help the firm continue to become “the advisers of choice to the middle market whilst driving increased competition in the professional services sector” in Ireland.

RSM Ireland began as a start-up in 1987 and it is now ranked as the eighth-largest accounting company in the country, serving domestic and global midmarket clients, as well as the public and not-for-profit sector. Over 65% of its clients are already active globally, meaning a cross-border service would be particularly useful to them.

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