Grant Thornton moots deal with private equity firms

Grant Thornton has reportedly considered selling a stake in its business to private equity in what would be the latest in a slew of deals in the accountancy sector.

According to the Sunday Times, Grant Thornton UK has reached out to several private equity groups to discuss a potential deal.

The report said its audit business would remain majority-owned by the firm’s 200 partners under any deal.

Industry sources said any deal for the accountancy company’s UK business would need to be structured to ensure its partners are incentivised to stay.

Any agreement would be the latest in a series of deals between private equity and the accountancy sector.

In March, Grant Thornton’s US business flogged off a majority stake to the New York-based investment firm, New Mountain Capital.

Weeks before, private equity group Hellman & Friedman and Valeas bought a majority holding in Baker Tilly for £780m.

Rothschild is reportedly advising on the talks but did not respond in time to a City A.M. request for comment.

Grant Thornton employs some 73,000 staff worldwide, and Grant Thornton UK is the sixth-largest accountancy firm in the country.

In a statement to the Sunday Times, the company said: “In light of ongoing developments in our profession, we are constantly exploring strategic options to assess what is best for our clients, our people, and our firm.”

Grant Thornton UK said it was not “actively engaged” in a deal but “continually evaluates” the business landscape.

“As all businesses do, we continually evaluate the external business and economic landscape and explore various avenues that will drive growth for our firm.

“This enables us to make informed decisions about what’s best for our people, our clients and our firm. We are not actively engaged in any such transaction.”

Grant Thornton was cut from the industry watchdog’s top tier of audit supervision in January after removing a string of high-profile clients.

The same month, UK chief executive Dave Dunckley stepped down suddenly after a five-year stint, ending his tenure almost three years earlier.

Dunckley had overseen two fines from the Financial Reporting Council (FRC) over audits of the now-collapsed Patisserie Valerie and Sports Direct, valued at £2.3m and £1.3m. The FRC has since said Grant Thornton’s performance had improved.

Grant Thornton’s UK sales rose seven per cent to £654m, while operating profit came in nearly a fifth higher, at £146m.