BDO ScanRevision claims a recent acquisition has moved it to within a fraction of overtaking Ernst & Young as Denmark’s fourth-highest fee-earning accounting firm. BDO ScanRevision acquired large public sector audit firm Kommunernes Revision (KR) last month from Kommunernes Landsforening (Local Government Denmark).
KR will continue as an independent company under the name BDO Kommunernes Revision (BDO KR) focussing on the audit of local authorities, consultancy, administrative services and training course activities.
BDO ScanRevision chair Henrik Brünings said official figures recorded Ernst & Young (E&Y) Denmark as earning fee income of €97 million ($142 million) in its most recent financial year. Prior to the acquisition, BDO ScanRevision was the fifth-largest accounting and consulting firm in Denmark with a fee income around €70 million. The new addition kept BDO ScanRevision in fifth position but pushed the combined revenue of both firms to €95 million, only €2 million short of E&Y.
“We have a strategy that says we want to grow further and the focus is especially on the four biggest cities in Denmark. We are interested in further acquisitions but it will not be in the next six months,” Brünings said.
BDO KR’s capabilities in consultancy work for local government was one of the reasons for the purchase. It has an almost 60 percent market share of the local government audit sector, and audits 17 municipalities (local authorities) in Greenland. The recent consolidation in Denmark of 174 municipalities into 98 larger units added to its appeal.
Brünings explained: “The bigger the municipalities get, the bigger the issues. Therefore we see a higher need for consultancy work in those municipalities because they have had a transformation where they are more like businesses.
“[The addition of BDO KR] makes BDO a full-scale audit and consultancy company. By this acquisition we match the Big Four totally; we are able to service all sorts of clients.”