Exploring the M&A landscape: Which is the most acquisitive accountancy firm?

Throughout the years, local accountancy practices have had to adapt to a host of challenges from increased specialisation and limited human resources to stringent regulatory requirements. This has led to a preference for firms to consider mergers or acquisitions for their established practices.

The recent mergers and acquisitions in the accountancy sector have centred on two primary themes being:

• consolidation of accountancy, audit, and general advisory services, and
• an industry focus on acquisitions of software and technology companies.

Consolidation of accountancy, audit, and general advisory services

In relation to notable local accountancy firms consolidating close to their main service lines of accountancy, audit, and general advisory, the following transactions have recently occurred:

• 2016 Spiteri Bailey & Co merging with RSM Malta,
• 2017 KPMG in Malta acquiring P5+ Management Ltd,
• 2021 Zampa Debattista and Mint Finance merging,
• 2021 Nouv acquiring Tuning Fork, and
• 2023 Equis is actively engaged in a strategic partnership with Nouv.

Acquisition of software and technology companies

As local businesses continue to place greater emphasis on their technological capabilities, the accountancy firms have acknowledged this trend and beefed up their staffing and service offering. A path that most ‘Big Four’ accountancy firms have chosen was strengthening their service line through acquisitions, and these included in:

• 2013 PwC Malta acquired Key IT Group Ltd,
• 2015 Deloitte Malta acquired Alert Group,
• 2015 Through collaboration between KPMG in Malta, UK and Netherlands, the acquisition of the then-listed Crimsonwing plc, and
• 2023 PwC Malta acquired Megabyte Limited.

Other

In 2017, PwC Malta acquired The Richard Clarke Academy further strengthening their academy offering.

Conclusion

I expect that, in the near future, there will be further mergers and acquisitions by Maltese accountancy firms.  The principal reason being that a number of accountants who had been pioneers in launching Malta as an international financial centre are now reaching retirement age. Furthermore, through the ever-increasing burden of regulation, there will be a drive for attaining greater economies of scale.  In this respect, one of the quickest ways to achieve such a goal is through a merger or acquisition. In addition, as the world grows more complex, the need for specialisation is bound to increase raising the potential for further consolidations in this regard.

At idisav, we assist a number of firms in their various stages of exit planning, from reducing their dependency on the owners to preparing a ‘go to market strategy’ to ensure the firm’s next stage is in capable hands. Whether you are seeking to acquire or divest of a business unit, feel free to contact idisav for more information, consultation, or assistance.