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Grant Thornton’s US business and two European buyout firms are among bidders to have made a shortlist of suitors vying to buy a stake in the mid-tier accountant’s UK franchise.
Grant Thornton’s private equity-owned US business, Sweden’s EQT and London-based Permira have been put through to the next round of bidding in a process aimed at securing a valuation of up to £1.5bn for Grant Thornton UK, according to people familiar with the matter.
Cinven, another mooted bidder, declined to comment on whether it had made the shortlist.
The shortlist leaves Grant Thornton with multiple strategic options, each of which would shake up the UK accounting landscape.
Grant Thornton operates as a global network of legally separate partnerships, and the idea of merging the UK business into the US arm would be a significant innovation. US firm leaders believe it would turbocharge growth by allowing them to better target international clients.
Grant Thornton US recently sold a majority stake to a consortium led by the private equity group New Mountain Capital, which is keen to bankroll international expansion. It has proposed the idea of acquiring not just the UK group but also Grant Thornton Ireland, which has hired bankers of its own to consider the idea, the Financial Times has previously reported.
Alternatively, a stake sale to a buyout firm would mark the most significant private equity transaction in the UK’s accounting industry to date.
The two firms and Grant Thornton US declined to comment.
“It’s fascinating to see that world opening up to private equity and they actually want us to own them,” said an executive of one of the firms that bid for Grant Thornton, referring to the buyout industry as a whole.
“It’s a people business and we understand people businesses because we are one,” the executive added.
Private equity involvement has been more extensive in the US accounting market, where the sale by Grant Thornton US of a 60 per cent stake to a consortium led by New Mountain Capital in March this year was the largest deal so far.
The potential sale of Grant Thornton UK initially garnered interest from a host of private equity groups including Blackstone, Carlyle, Bridgepoint and CVC Capital Partners, the FT previously reported.
Luxembourg-based CVC, which was initially seen by industry executives as a frontrunner, considered making an offer but ultimately decided not to bid, people with knowledge of the process said.
CVC’s ownership of Teneo, to which it bolted on Deloitte’s former restructuring unit in 2021, may have made it too complicated for the private equity firm to bid for another financial services company, another person with knowledge of their operations suggested.
UK rules mandate that audit firms must be majority owned by trained accountants, meaning any investment by a buyout firm would be likely to involve ringfencing Grant Thornton UK’s audit practice.
Grant Thornton UK said was exploring “various avenues that will drive growth for our firm,” adding: “No decisions have been made and, whilst we are considering our options, we will not be commenting further.”
Carlyle, Blackstone, Bridgepoint and Rothschild declined to comment. CVC did not immediately respond to a request seeking comment.
Additional reporting by Ivan Levingston in London
https://www.ft.com/content/abb9be85-7318-460d-a699-07c0a1987ca2
