Accounting firm RSM Richter LLP, the insolvency specialist currently feasting off some of the country's highest-profile corporate flameouts, including Jetsgo Corp., Ravelston Corp. and Saan Stores Ltd., is scooping up Calgary tax and audit shop Moody Shikaze Boulet LLP in a merger that bolsters its national reach and positions it to tap into the gushing Alberta economy.
The deal, which adds 20 people, including 13 accountants and three tax lawyers, to Richter's 500-strong staff in Toronto and Montreal, also extends its reach in the West to include assurance work, enabling it to compete head-on for increasingly lucrative audit work with Canada's Big Four accounting firms. "It's the place to be, Alberta's booming," said Peter Farkas, Richter's Toronto managing partner. "The opportunities here are fantastic."
As part of the deal, which closed yesterday, Richter's existing 11-person Calgary office, added four years ago, will be consolidated into Moody's larger operation. Also, the Moody name has been changed to RSM Richter. Other terms were not disclosed.
Richter is a major -- and growing -- player in insolvency and restructuring work, currently serving as receiver or monitor in a variety of corporate cleanups.
In a separate announcement yesterday, the firm was appointed by Norshield Asset Management Ltd. to monitor its continuing business and financial affairs. The appointment comes in accordance with an order by the Ontario Securities Commission, which has been investigating the troubled hedge fund in connection with $375-million in client investments that Norshield has frozen. The OSC and the Autorité des marchés financiers (or AMF, Quebec's regulatory watchdog) have barred Norshield from conducting business.
Kim Moody, a founding partner of four-year-old Moody Shikaze Boulet, said merging Richter's Calgary office, which has been focused on restructuring work, with Moody's tax and audit team will enable Richter to provide a full suite of accounting services to compete with global giants such as Deloitte & Touche LLP, Ernst & Young, KPMG LLP and PricewaterhouseCoopers. "We look at the Calgary office as a fresh alternative to the Big Four," Mr. Moody said.
In addition to insolvency work, Richter specializes in tax planning and financial advisory services for mid-market, privately held companies with revenues between $25-million and $1-billion. It has particularly strong roots in Montreal's retail and clothing trades and ranks as one of the top-10 accounting firms in the country in terms of revenue, just behind such second-tier players as BDO Dunwoody LLP and Grant Thornton LLP.
Mr. Farkas said Richter had been looking to expand in Calgary for some time but was unhappy with the merger prospects until a fateful meeting with Kim Moody a year ago as part of a pitch to sell Richter's valuation services. "We laughed because we had culled through all the candidates in Calgary and, suddenly, we thought 'Aren't these the right guys,' and so we circled back," he said.