The Cape Town and Port Elizabeth offices of BDO and Grant Thornton are to merge in a move that will cement Grant Thornton’s position as the largest mid-tier firm in South Africa.
BDO has 19 partners and directors in Cape Town and Port Elizabeth with 207 staff and total revenue of ZAR90 million ($12 million). Grant Thornton has 12 partners and directors in Cape Town and Port Elizabeth with 127 staff and revenue of ZAR44 million.
As a result of the merger, Grant Thornton South Africa will have annual revenue of ZAR400 million, which represents 31 percent growth since its figures were published in the International Accounting Bulletin’s 2009 South Africa survey. The firm will have 840 staff in seven offices.
“BDO has a larger and established presence in the Cape Town market and we’re delighted to be joining forces with them,” Grant Thornton Cape Town managing partner Deryck Woolley said.
BDO South Africa recently re-organised its practice into two separate firms, resulting in BDO Cape, which has Cape Town and Port Elizabeth offices, and a second firm with offices in Johannesburg, Pretoria and Durban called BDO SA.
BDO SA is not involved in the merger and the loss of ZAR90 million would mean BDO’s annual revenue in South Africa would drop to about ZAR175 million.
The combined offices in Cape Town and Port Elizabeth will be led by joint managing partners Ian Scott, who came from BDO, and Neil Miller from Grant Thornton. The joint senior partners will be Grant Thornton’s Deryck Woolley and James Salmon, who was formerly from BDO.
Scott, who was the managing partner of BDO Cape, said combining the firm’s strong market position with Grant Thornton’s established name and intellectual property merges the relative strengths of each firm.
“Both practices share a focus on privately held business and believe in client proximity and personal partner attention as a differentiating approach. The needs of clients, staff and other stakeholders have guided this process throughout,” he added.
Grant Thornton South Africa national chairman Leonard Brehm said the merger represents a major step in the firm’s strategic growth plans.
“It will create a more richly resourced firm, with a superior client offering and it will significantly strengthen our market position relative to the Big Four,” Brehm added.