Accountancy firms with turnovers of up to £10m will be urged this week to stave off threatened moves from US and European consolidators by joining forces to create a UK-wide brand for smaller practices. Tomorrow, Jobtel, a mergers and acquisitions broker specialising in accountancy practices, will write to senior partners to gauge their interest in creating a domestic consolidator to fend off the consolidators that have swept across US practices in recent years. Associate director of Jobtel Jeremy Kitchen said the brokerage hoped to act as a catalyst for the creation of a UK consolidator. 'Consolidators base their strategy on locating "foundation firms" with strong management to become the bedrock of the new structure. The benefits of being in at the start are considerable,' he said. David Turnball, chairman of the UK 200 group of accountants, said any firm of chartered accountants would be ill advised to sell out to a consolidator until a list of runners becomes clear. 'Any self-respecting firm should not be thinking of selling to consolidators, but should be designing and implementing a focused strategy to develop their practice so that it is worth considerably more in two or three years time.' But John Malthouse, chairman of the English ICA's General Practitioners Board, said consolidation could bring new vitality to accountancy practices. 'It's certain that the consolidators, as acquirers, will come here and it's essential that accountants get a handle on this. It could be that the value locked up in accountancy practices will get realised.' August Aquila, who has led American Express' purchase of more than 100 US accountancy practices, has spoken at three UK events this autumn describing how Amex's strategy in the US has led to its purchase of $300m worth of practices since 1997. 'This is not an exit strategy for partners. We're buying talent and the relationship with clients,' he told senior partners. The US accountancy profession has been dominated by consolidation in the last five years. It currently holds 5% of the market, but Aquila estimates that it could hold 30% within five years. Amex now occupies the number ten slot in the US accountancy market through its purchase of chartered public accountant practices in the $5m to $50m fee income bracket.
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