Grant Thornton UK partners green light private equity deal with Cinven
Accountancy giant Grant Thornton UK partners have “unanimously voted in favour” of investment from private equity firm Cinven.
It was reported in July that the firm reached out to several private equity groups to discuss a potential deal, as the accountancy firm aims to reach £1bn over the coming years.
In March, the UK arm reported that over 2023, it achieved seven per cent net revenue growth to £654m and an 18 per cent increase in operating profit to £146m.
Following a review of its strategic options over recent months, the firm revealed today that its 220 partners voted in favour of a deal with Cinven, one of Europe’s largest private equity firms.
Grant Thornton will retain its partnership structure, but with the external investment, has plans including to introduce an employee benefit trust.
This arrangement will be for staff below the partner grade, with the aim for them to benefit from the firm’s “long-term growth”, comprising both cash and equity rewards.
Also as part of the transaction, the firm’s partners have agreed to hold back a material amount of equity for future partners during the investment period.
The terms of the proposed transaction between Grant Thornton and Cinven remain confidential, however, Sky News‘ Mark Kleinman reported that it is estimated to be worth up to £1.5bn.
The deal is expected to complete towards the end of the first quarter of 2025, subject to regulatory approval.
Back in the summer, Grant Thornton US made the news as it was pondering a deal that would see it acquire its affiliates in the UK and in Ireland.
However, it was confirmed in October that the Irish arm and the US arm were merging its advisory and tax businesses, in a deal backed by New York private equity firm, New Mountain Capital.
Commenting on today’s news, Malcolm Gomersall, chief executive of Grant Thornton UK said: “The story of our growth journey over recent years has been remarkable.”
He noted that the firm recognises “the opportunity that external investment can offer to help us further accelerate our growth, whilst retaining our partnership structure and ethos, and provide an outstanding experience for our people and clients.”
“We were attracted to [Cinven] admiration of our commitment to high-quality service (particularly in our audit practice), our breadth of services, our client centric offering, the culture we foster at our firm and our growth plans,” he added.
While Maxim Crewe, partner at Cinven added: “Grant Thornton’s reputation for quality, its stand-out culture and considerable financial performance in recent years provide a very attractive partnership proposition.”