BDO South Africa has said it is looking to challenge the dominance of the Big Four in South Africa, as it prepares to add Grant Thornton Johannesburg to its network.
According to BDO, it is currently in advanced negotiations for the office, following the addition of Grant Thornton’s offices in Cape Town and Port Elizabeth in February this year.
These acquisitions will help BDO to more than double its size in the country.
According to The International Accounting Bulletin, BDO reported South African fees of R504.9m for the year ending September 2017, with 675 partners and staff.
Once the transaction is completed, BDO South Africa said it will have 1,500 partners and staff, and fee income of R1.2bn ($90m).
According to BDO South Africa CEO, Mark Stewart, the transaction will enable BDO to challenge the Big Four in South Africa. A fee income of R1.2bn would still leave it at less than half the size of PwC, Deloitte or EY. KPMG is still recovering the Gupta scandal that rocked the firm in the second half of 2017, and has seen it lose at least one high profile audit client in 2018, though.
Stewart said: “The integration of Grant Thornton Johannesburg into BDO will create the largest mid-tier accounting firm in South Africa with fees in excess of R1.2 billion, thus positioning the firm as a credible alternative to the four largest auditing firms in South Africa.
"The audit profession is undergoing huge change currently, and the demand for in-depth, technical and industry expertise is critical. BDO will now be in a far better position to take advantage of new opportunities in the market and to provide clients and employees with a significant alternative to the competition."
For Grant Thornton’s part, it currently lists itself as having offices in Durban, Nelspruit, Pretoria, Polokwane, Rustenburg and Southern Cape, alongside its Johannesburg office on its website.
The transaction is expected to be effective during the fourth quarter of 2018.