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Jobs at risk as Baker Tilly acquires RSM Tenon

The Platforum table

Baker Tilly acquired rival RSM Tenon last week shortly after the firm had gone into liquidation.

In July, Baker Tilly announced it was in talks to buy the professional services firm, but in a statement to the stock market last week, Baker Tilly said it was pulling out of a potential deal.

Lloyds Banking Group informed RSM Tenon on Thursday that the firm was likely to break its banking covenants and three insolvency practitioners from Deloitte were appointed as administrators.

Baker Tilly subsequently bought all of RSM Tenon’s trading subsidiaries, including the advice arm, from the administrators. No price has been made public.

A Baker Tilly spokesman says once the sale is complete an “integration team” will be set up to review the acquisition. He says the firm can “make no guarantees” on future job losses, although Deloitte says no job losses are expected.

RSM Tenon made a pre-tax loss of £7.5m for the six months to 31 December 2012, compared to an £83m loss in the same period in 2011.

In December, Tenon shareholders voted to drop PricewaterhouseCoopers as the firm’s auditor after a regulatory investigation was launched into accounting errors at the firm.

Last year, HgCapital made a 43p-a-share cash offer valuing Tenon at £140m, but backed out of the deal after bringing in Deloitte to conduct due diligence. On the day of Baker Tilly’s acquisition Tenon was valued at 1.12p per share.

Anand Associates financial architect Bhupinder Anand says: “It is a smart move by Baker Tilly because this way they acquire RSM’s substantial client banks and staff without the burden of the debt.”

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