Grant Thornton partners have reportedly voted to pay $50 million in order to bail out BDO Melbourne Sydney, which is still struggling to deal with $100 million in debt – although some partners say they were pressured into signing.
The report comes after BDO announced last month it had decided to terminate the BDO Victoria and New South Wales offices, citing “unreasonable risks”, following a strategic review of the business taken over the previous 18 months.
Grant Thornton also said at the time it would be working with the BDO NW and Victorian leadership team to strike a deal. Such a deal would also help Grant Thornton reach its growth target of $300 million by 2015.
Grant Thornton was contacted by SmartCompany this morning, but a reply was not available prior to publication.
However, chief executive Robert Quant later said in a statement that the company had received “overwhelming support” for the merger from his national partner group.
“Following intensive dialogue…the vast majority have indicated they are strongly behind the merger.”
According to the Australian Financial Review, 81% of Grant Thornton partners agreed to acquire the BDO Melbourne Sydney practice, which has two weeks to finalise the deal. BDO International loses the right for the practice to use the BDO name on May 1.
The deal is made of $26.4 million in cash, $21 million scrip and a deferred consideration of $2.5 million.
However, the publication reports some partners are unhappy with the deal, saying they were pressured to vote for the plan.
It also states that some partners have agreed to lower salaries for two years.
Last month, BDO International chief executive Martin van Roekel said in a statement the company would terminate the Victoria and New South Wales offices.
“The financial stability of BDO NSW/VIC Pty Ltd, and their consequent ability to service clients in line with the expectations required of them by BDO is in contrast to the rest of the BDO firms in Australia, which are performing extremely well.”
Grant Thornton Australia responded by saying combing the practices with its own would be “in the best interest of their clients”