Grant Thornton South Africa & BDO Cape Town Merge

Grant Thornton South Africa (GT SA) and BDO Cape (Cape Town and Port Elizabeth) merged under the Grant Thornton name, on November 1.

The offices will have joint MPs, Ian Scott and Neil Miller. Other BDO offices in South Africa are not involved in the merger.

Ed Nusbaum, CEO of GT International, says, “This merger is a major accomplishment for our South African firm and we are committed to building a strong local firm in this key strategic market.” The merger creates the largest accounting firm in SA’s mid-tier market, followed by Mazars.

The deal positions GT to obtain more work, particularly from privately held businesses and listed companies. Previously the two firms obtained most of their work from privately held businesses. The firm will be led by GT national chairman Leonard Brehm, with a staff of 900 and 97 partners and directors.

“We took a decision 10 years ago to develop an international strategy, which included building an infrastructure and investing in intellectual property,” said Brehm.

The new Companies Act, which will come into effect on April 1, removes the requirement for privately held companies to have their results audited. Unlisted private companies and small firms will now have a choice to either be audited or have a review process carried out. This means medium to larger auditing firms will have an advantage over smaller practices, as they will have a bigger share of audit work because they already do the lion’s share of it, particularly for listed companies.

Recent mergers in the audit profession include the tie-up between BDO SA and Moore Stephens MWM, September 1. BDO SA recently merged with Cape Town-based Cameron & Prentice. MGI Bass Gordon and Gross Hendler & Frank disclosed plans to merge their Cape Town offices in October.