Finally, Grant Thornton UK has picked a private equity firm to whore itself out to. We can only hope this means that the UK media — looking at you, The Times — will stop cranking out hype pieces about how private equity firms are battling it out to win GT’s PE deal. It seems all that hype worked out for GT given that bidding exceeded the firm’s revenue by £646 million, a nearly 2x multiplier.
Grant Thornton UK, the country’s sixth largest accounting firm by revenue, has agreed to sell a stake to the buyout group Cinven, marking the most significant private equity investment to date in the UK accounting sector.
Cinven beat rival offers from other private equity groups including Sweden’s EQT, and from Grant Thornton’s sister firm in the US, which had proposed a transatlantic merger.
Specifics of the deal are not known at this time and the firm told FT in a statement that the terms “remain confidential.” FT said a source told them bidding for the firm in an auction organized by Rothschild had reached approximately £1.3 billion ($1.6 billion USD), a little short of the £1.5 billion partners were hoping for. For fiscal 2023, GT reported revenue of £654 million (growth of +7%) and operating profit of £146 million. Wait, is that right? And they were able to get private equity to bid up to £1.3 billion? Send those Times shills a nice Edible Arrangements bouquet for their hard work.
“Having evaluated the external landscape, we have agreed initial terms with an investor, who we feel is best placed to support our accelerated growth in the medium term,” said GT to FT.
The deal isn’t official quite yet, Grant Thornton’s 200-some partners still have to ratify it.
It seemed pretty clear when Grant Thorntons US and Ireland announced a merger a few weeks ago that the UK business was not joining them in the mid-tier threesome floated as a possibility back in July. The GT US/Ireland deal was assisted by New Mountain Capital, the private equity firm that bought a majority stake in GT US in March. Apparently GT Ireland’s 45 equity partners were looking at payouts around €6.5 million ($6.9 million USD) in cash for the GT US deal.
This is really starting to feel like 1999 except instead of Pets.com and dudes on motorcycles who can deliver condoms and DVDs within an hour it’s professional services firms. What could go wrong!
No firm is better at making WHORING their DYNAMIC CHOSEN MARKET than the firm members at GT!!! Perhaps the sweet penetration of PE cash will engorge GT UK with an INSTINCT FOR GROWTH necessary to penetrate new DYNAMIC CHOSEN MARKETS!!!!!!