Grant Thornton Ireland has merged with professional services firm Foster McAteer as part of a strategic move to become a leader in the corporate recovery market.
The merger adds five partners and 24 staff to Grant Thornton Ireland. Foster McAteer’s reported fee income was €4 million ($5.9 million) in its most recent financial year. Grant Thornton said the merger will bring the total revenue of the firm to more than €50 million and increase the workforce to 450 staff. Grant Thornton Ireland managing partner Paul Raleigh said the mid-tier firm is now close in size to rivals BDO Simpson Xavier, a firm that was placed fifth in this year’s International Accounting Bulletin Ireland survey.
Foster McAteer founding partner Brendan Foster said the move to Grant Thornton will benefit Foster McAteer clients.
“Despite the changing economic environment many of our clients continue to expand and the merger will enable us to increase our depth and range of professional services,” he said. “Our enlarged insolvency and recovery teams are ideally positioned to advise companies and individuals during these challenging times.”
Grant Thornton’s interest in Foster McAteer, a firm in which about 65 percent of its fee split is generated through insolvency services, is part of a strategy to build certain specialist services.
Grant Thornton Ireland’s insolvency practice contributes 8 percent of the firm’s overall revenue and the Foster McAteer addition provides valuable expertise in this growing service area.
“Foster McAteer has developed a very successful practice particularly in insolvency/corporate recovery, and they were looking for access to the brand and the ability to use their skills in a bigger arena so that was the driver for them,” Raleigh said.
“For us it was clearly that we were adding in on top of our own corporate recovery ability by taking in Foster McAteer and we are now the leaders in the corporate recovery market. Our strategy is to build market leadership in niche areas like corporate recovery. Business risk is another area we are keen on developing, which is going very well for us.”
Raleigh admitted that Ireland’s economic slowdown, partly due to the credit crunch, is having an impact on the professional services market. He highlights three important objectives that will help the firm prosper in trying times.
“One is growing for development as opposed to growth for growth’s sake. Second is clearly operating as a specialist rather than a generalist and the third thing is operating as part of a successful international network,” he said.
“The market here is certainly different from what it was in 2007. It’s more difficult in economic terms. We have got a very well balanced practice, we have a strong audit and tax side, which gives us 60 percent of our income and is compliance-based.
“In that respect, we are not so dependant on the specialist assignments as some firms are, however, we are not going to be immune to the economic slowdown either. We will be watching our costs and do all of the things that you would expect to do in an economic slowdown.”
Raleigh said the firm has no other merger and acquisition targets right now but they are keeping an eye on the market.