EY buys economic advisory firm DKM

Brendan Dowling, Annette Hughes and John Lawlor to profit most from sale

 Shane MacSweeney, Annette Hughes  and Mike McKerr: acquisition of DKM is in line with EY’s global and Irish strategy to integrate the full range of economic advisory services. Photograph:  Naoise Culhane

Shane MacSweeney, Annette Hughes and Mike McKerr: acquisition of DKM is in line with EY’s global and Irish strategy to integrate the full range of economic advisory services. Photograph: Naoise Culhane

 

EY Ireland has made its first acquisition with the purchase of the well-known DKM Economic Advisory practice for an undisclosed sum.

DKM, which was owned by Davy stockbrokers until it was bought out by a couple of its researchers in 2006, will relocate to EY’s Dublin offices this month. The practice will be integrated into EY’s economic advisory team which is led by partners Luke Charleton and Shane MacSweeney.

EY says it will draw upon DKM’s expertise as it advises public sector and major private sector clients, who are increasingly seeking detailed advice on the potential economic ramifications of geopolitical issues such as Brexit.

“Our clients are grappling with more uncertainty and their questions are becoming more complex,” said Mr MacSweeney.

“By bringing in this deep experience [of DKM] in-house, we will be able to offer even more rounded solutions to our public and private sector clients.”

The three main beneficiaries of the deal will be DKM’s chairman and co-founder Brendan Dowling, who owned 45 per cent; its director and housing expert, Annette Hughes, who held 30 per cent; and former Economic and Social Research Institute (ESRI) researcher John Lawlor, who owned the remaining 25 per cent.

Undisclosed price

The DKM brand was originally established by Mr Dowling alongside renowned economist and commentator Colm McCarthy and former Davy chief economist Robbie Kelleher, whose initials comprised the moniker.

EY declined to reveal the purchase price. DKM’s most recent accounts reveal shareholders’ funds of €310,000 at the end of February.

That figure is unlikely to have any correlation to the consideration, however, as it doesn’t appear to account for goodwill, which likely accounted for the bulk of DKM’s value.

Its most recent accounts show it employed six consultants, who will all join up with EY.

Mr MacSweeney said EY’s private sector advisory clients, which include some major multinationals, increasingly seek predictions on issues such as wage growth, while its public sector clients seek advice when planning future infrastructure spending. He said DKM’s expertise will help it deliver more detailed advice to these clients.

He also predicted the so-called “top four” accounting and advisory firms – which, alongside EY, include Deloitte, PricewaterhouseCoopers and KPMG – will increasingly look to make acquisitions to bolster their offerings.

“If you look elsewhere, you will find that the top four make more acquisitions abroad than they do here in Ireland,” he said.