E xpanding advisory and accounting firm HLB Ireland has completed no fewer than 12 acquisitions in the last seven years, with more to follow this year.

Its latest deal to acquire Dublin practice Leahy O’Riordan Chartered Accountants in April, brings HLB Ireland’s headcount to 180.

Fee revenue has doubled over the past 12 months and is set to double again in the two years ahead, according to Managing Partner Mark Butler, bringing the goal of becoming one of Ireland’s top 10 professional services firms well within reach.

These acquisitions are more than just about increased scale. “We’re in this for the long haul”, Butler says, “We’re very much focused on building one integrated business, rather than a collection of businesses running independently of each other”.

The firm’s business model is built around three strategic pillars: people; client experience; and innovation.

“People are central to all of our integrations”, Butler explains, “We want new partners and teams to join us for two reasons: to allow us to bring their culture into ours; and to provide continuity for their clients, because in Ireland, you deal with the people you know, like and trust. That’s what it’s all about”.

Butler joined HLB Ireland—then Sheehan Quinn & Co.—in 2000, just at the turn of the millennium, having studied accounting and IT at Griffith College in Dublin and trained with P. Geraghty & Co.

After leaving Sheehan Quinn & Co. to work briefly in the regulatory sphere, he was invited to rejoin the firm in 2003 with a view to becoming a partner within five years.

“We did it the old-fashioned way”, he recalls, “We had a lot of private owner-managed business clients that had been with the firm since the seventies, and it was my job to build relationships with them over that five-year period.

“I think that experience has stood to us as a firm right up to this day. When we acquire other firms, it’s based on the understanding we have cultivated that our profession is about people and the relationships and trust you build with them. That takes time—it doesn’t happen overnight— and it remains at the core of our ethos”.

HLB International: the global impact

In 2022, the firm joined HLB International, a global network ranked ninth worldwide by fee revenue.

“HLB International was started by a US firm and two UK firms back in the late sixties”, Butler says.

“We joined because we had a lot of clients who needed services internationally. They might need an audit in Belgium or support for a property purchase in Portugal, for example, and we knew that, if we didn’t join an international network, they would end up going to larger firms to get that service”.

The decision was “transformational” for the firm, Butler says—and not just from the perspective of servicing existing clients.

“WE WANT NEW PARTNERS AND TEAMS TO JOIN US FOR TWO REASONS: TO ALLOW US TO CAN BRING THEIR CULTURE INTO OURS; AND TO PROVIDE CONTINUITY FOR THEIR CLIENTS, BECAUSE IN IRELAND, YOU DEAL WITH THE PEOPLE YOU KNOW, LIKE AND TRUST. THAT’S WHAT IT’S ALL ABOUT”

“We’ve been able to win a lot of new business because any business that comes into Ireland through the HLB network comes to us”, says Butler.

The move has also profoundly impacted the scope of the firm’s growth strategy. “Our focus had been on organic growth, but I learned from my friends in the network that to grow a business, you need inorganic growth as well”, explains Butler.

“You can only do so much with your own network. You need to broaden that network through mergers and acquisitions in order to grow a long-term sustainable practice, which is our goal”.

Expansion and the acquisition trail

HLB Ireland hit the acquisition trail in earnest in 2019. “Our first merger was with Conor Crotty Murray, a like-minded firm with lots of mid-tier clients, including family-owned businesses and private clients—everything below plc level”, Butler says.

In addition to growing market share, the firm’s growth strategy is also about expanding its service offering.

“A lot of smaller practices tend to be very much compliance-led”, Butler says, “By joining together, through mergers and acquisitions, you gain the scale and resources to extend service lines in areas like advisory, tax planning, succession planning and technology.

“Being able to bring these new service lines to the clients of the practices we bring on board means we can sustain and grow those existing relationships. They don’t need to go elsewhere for those services when they need them”.

Technology is another growth area for HLB Ireland which acquired Future Range, the Dublin-based IT managed service business, last year.

“I could see that accountancy firms internationally were starting to invest in technology service lines. Maybe my background in IT from my college days influenced me, but I decided we would bring an IT business into the group”, Butler says.

Future Range continues to trade under its own name but is, Butler says, an integral part of the HLB service offering, providing technology, cybersecurity and IT managed services, as well as artificial intelligence (AI) readiness and implementation services.

Sector focus is another priority for HLB Ireland’s Managing Partner. “Having sector specialisms within a practice is becoming more and more important”, Butler says.

“The days of advisory and accounting firms being ‘all things to all people’ are gone and this shift will only continue into the future”.

HLB Ireland has a strong presence in niche sectors, such as dentistry, veterinary, agri-food and arts and entertainment.

“We’ve seen a lot of growth in dentistry and veterinary, where we have particular specialisms and technology offerings. Agri-food is there as well”.

“Veterinary was the first sector I really focused on. I could see there was consolidation in the sector in the UK, and I thought, if it’s happening there, it’s going to happen here as well.

“We built the expertise in veterinary and now act for, or have acted for, just about all of the corporate players in the veterinary space”.

Cardinal Capital: new funding model

A change in HLB Ireland’s funding model came about last year when Cardinal Capital, the Dublin-based alternative investment manager, invested in the firm.

“Up until April last year, we were self-funded and all of our acquisitions were funded through our friendly bankers and personal resources”, Butler says.

“Then, it became clear we wouldn’t be able to continue alone on our journey to becoming the number one practice of choice for owner-managed business in Ireland.

“WHEN WE MEET PEOPLE, THEY KNOW WE’RE SERIOUS ABOUT A DEAL BECAUSE WE HAVE THAT BACKING. IT’S ALSO BEEN VERY POSITIVE FROM A RECRUITMENT PERSPECTIVE, BECAUSE PEOPLE UNDERSTAND THAT THERE WILL BE OPPORTUNITIES IN THE FIRM BECAUSE OF OUR GROWTH”

“There are only so many times you can mortgage your house. If we wanted to continue to grow, we realised we were going to need a funding partner, and Cardinal took a minority investment.

“It is our goal to build a successful all-Ireland advisory business, so it’s important that we maintain control of the business.

“It’s also important to us that the investment in our firm be Irish led; that we are building an Irish business with support from within Ireland”.

So far, the Cardinal Capital partnership has been “very positive” for HLB Ireland, Butler says. “Of the 12 transactions we’ve done, we have been able to close six in the last 14 months because we had Cardinal as our funding partner.

“When we meet people, they know we’re serious about a deal because we have that backing. It’s also been very positive from a recruitment perspective, because people understand that there will be opportunities in the firm because of our growth”.

Future trends: AI and consolidation

Butler foresees further consolidation in Ireland’s accountancy sector in the years ahead. “We are just really at the start of it”, he says.

“Our profession is very fragmented with lots of small accounting practices. That’s going to change through ongoing consolidation.

“Also, people entering our profession want something different. They don’t want the old model; they want opportunities to work in more exciting and interesting areas of practice, rather than just compliance”.

AI is also set to have an impact. “I look at AI as an opportunity rather than a threat. It is moving at such a fast pace—even in the last six months, the progress has been unbelievable.

“Simple things like marketing, presentations and proposals—even building corporate finance models and administration tasks like preparing engagement letters— can all now be done by AI.

“I think AI is also going to enhance the audit process for businesses. Auditors will be able to focus their time and energy on identifying whole-of-business risks because a lot of the mundane tasks that would otherwise take up their time will be done by AI”.

For HLB Ireland, meanwhile, Butler sees a bright future as an “outsourcer and adviser of choice”.

“We will move much more towards a client accounting services model, where we will be doing everything for SME clients”, Butler says.

“They won’t have internal accounting staff; AI and other technologies will help us deliver that for them—the payroll, purchase and sales invoices, and so on—with our oversight as accountants.

“We will become trusted business partners, helping our clients run their businesses better with the benefit of faster financial information”.

While he is firmly focused on the future, Butler also has an eye on the past. “We are celebrating 50 years in business this year—it’s an important milestone for us”, he explains.

“This year also saw us put a new structure on the business with the formation of Mentora Group in which HLB Ireland and Future Range will now operate.

“Our differentiator is that, in the mid-tier sector, no one else is able to offer accounting advisory and technology, cybersecurity and AI services all in one firm”.

And Butler has no plans to abandon the acquisition trail. “We’ve still got big ambitions”, he says.

“We are engaged in processes at the moment and hope to close some deals by the end of the year. Our goal is to be an all-island business, and to have a presence in each of the major cities with advisory, accounting and technology services under one roof”.

*Interview by Barry McCall