The personal fairness backer of Six Nations Rugby is plotting to purchase a stake in certainly one of Britain’s greatest audit corporations – a deal which might have ramifications throughout the skilled companies sector.
Sky Information has learnt that CVC Capital Companions is among the many buyout corporations getting ready to desk bids for a controlling stake in Grant Thornton UK.
The method, which is at an early stage, is anticipated to worth the accountancy group at between £1bn and £2bn, and will lead to probably the most vital transaction to this point within the UK’s audit trade.
CVC’s curiosity is especially vital, nevertheless, as a result of it already owns Teneo, an expert companies agency spanning public relations, political recommendation and monetary restructuring, together with firm administrations and liquidations.
The latter a part of the enterprise was acquired from Deloitte, the skilled companies large, in 2021 and was partly borne out by the rising subject of conflicts inside massive accountants between their audit and consulting arms.
One Metropolis analyst mentioned this weekend that the frequent possession of an curiosity in Grant Thornton UK and Teneo’s monetary restructuring enterprise might recreate these potential conflicts.
CVC has owned Teneo since 2019 and could be anticipated to pursue an exit from the enterprise within the subsequent couple of years.
Audit scandals at corporations equivalent to Bhs and Carillion fuelled public and political strain for the separation of accountants’ audit and consulting operations.
Though audit reform didn’t make it onto the statute e book below a succession of Conservative prime ministers, it was included within the current King’s Speech, paving the best way for more durable audit regulation.
Grant Thornton has itself been no stranger to run-ins with the present watchdog, the Monetary Reporting Council (FRC).
In 2022, it was fined £1.3m for “serious failings” in its audit of Sports activities Direct, the sportswear empire based by Mike Ashley and now often called Frasers Group.
It was additionally handed a £2.3m penalty the yr earlier than for demonstrating a “serious lack of competence” in relation to its work on Patisserie Holdings, the proprietor of the collapsed cafe chain Patisserie Valerie.
Since then, Grant Thornton has slashed the variety of so-called public curiosity entity (PIEs) audit shoppers, a class which incorporates banks, insurers and different corporations deemed to be of specific significance.
This has resulted in an enchancment in audit high quality, in accordance with one Grant Thornton companion, in addition to a lessening of the scrutiny utilized by the FRC.
Individuals near the sale course of for the UK arm of Grant Thornton say it’s searching for expressions of curiosity subsequent month, and is ready to think about a deal each involving or excluding its audit enterprise.
CVC is anticipated to face stiff competitors from a mess of different personal fairness corporations.
A spokesperson for Grant Thornton UK LLP mentioned: “As all companies do, we regularly consider the exterior enterprise and financial panorama and discover varied avenues that may drive progress for our agency.
“This permits us to make knowledgeable selections about what’s greatest for our individuals, our shoppers and our agency.
“We aren’t actively engaged in any such transaction.
“We’re dedicated to remaining as a multi-disciplinary agency.
“We will not be commenting further on this matter.”
Grant Thornton UK has about 200 companions, who would have a decisive vote on any transaction.
The agency’s US entity has already concluded a cope with New Mountain Capital, one other personal fairness group, to promote a majority stake.
Final month, the Monetary Instances reported that Grant Thornton US had held discussions about buying each its UK and Irish associates, though the probabilities of such a deal occurring have been described this weekend as “slim”.
CVC declined to remark.
