AAB set for Sale with £250 Million Price Tag as Accountancy Deal Sector Heats Up

AAB, a prominent mid-market accountancy firm, has been placed on the market with a hefty £250 million price tag. August Equity, the private equity owner of AAB, has enlisted investment bankers from William Blair to oversee the sale process. According to informed sources, the move comes as deal activity in the accounting sector continues to gather momentum.

Established in 1990 in Aberdeen, AAB has grown into a business boasting over 1,000 employees. The firm offers a diverse range of services, including auditing, tax advisory, corporate finance, restructuring, and other professional services to small and medium-sized businesses. Its operations span offices in Edinburgh, London, Belfast, and even Michigan in the United States.

The sale has reportedly attracted interest from two key players that are already heavily involved in consolidating the mid-market accountancy sector. Smith & Williamson, backed by Evelyn Partners, and Cooper Parry, recently aligned with US-based private equity firm Lee Equity, are among the contenders vying to acquire AAB. Both firms have longstanding histories in professional services, with Smith & Williamson tracing its origins back to 1881 in Glasgow and Cooper Parry leveraging private equity support to expand aggressively in recent years.

The accounting sector has witnessed a surge in private equity interest recently, with major deals reshaping the market. Grant Thornton, the UK’s sixth-largest auditor, secured a significant investment from buyout firm Cinven. Cooper Parry has seen ambitious growth after expanding beyond its Midlands roots and acquiring firms across various regions, including London. Other private equity firms, such as Sovereign Capital, have launched groups like Affinia to consolidate accounting services in key markets.

Bankers involved in the AAB deal have remarked on the premium valuations professional services firms can command. Accounting firms typically sell for an estimated multiple of around 15 times their earnings before interest, taxes, depreciation, and amortisation (EBITDA). Despite this, sceptics raise concerns over the sustainability of these valuations, warning of the potential formation of a bubble in the sector.

Representatives for William Blair, AAB, Cooper Parry, and Smith & Williamson have so far declined to comment on the ongoing sale. Industry observers will be watching closely to see how the transaction unfolds and what it signals for the future of private equity activity in the accountancy market.