Grant Thornton’s US business is in talks to buy the UK and Irish affiliates of the accounting group. This would be the largest M&A transaction in the industry to date.
Grant Thornton US announced a transatlantic merger after selling a majority stake in the company to private equity investors. The firm had promised to boost growth for its tax and consulting businesses and consultation .
According to sources familiar with the proposal, the US firm has set its sights on expanding internationally and expressed interest in joining forces with firms from Grant Thornton’s global networks. However, they cautioned that these discussions are still at an exploratory phase.
All national firms are owned by local partners and legally separate, but they operate under a single umbrella which imposes minimum standards, and coordinates international work.
According to the plan for a three-way merger, current partners from the UK and Ireland firms would become owners of an international holding company headed by Grant Thornton’s US private equity partners and owners. According to sources familiar with the situation, the relative valuations of both firms have yet to be discussed. The UK and Irish firms may decide to pursue a different deal or not pursue any at all.
The UK company has already hired Rothschild in order to explore its options. Private equity firms have been asked to express interest by bankers as an alternative merger with US firm.
People familiar with the matter said that Grant Thornton Ireland recently hired Deutsche Bank to explore similar options.
According to its annual report for last year, Grant Thornton UK reported revenues of £654mn with an operating profit of £146mn, while the Irish company had revenues of approximately €300mn.
Grant Thornton US’s last fiscal year, which ended in July 2023, had revenues of $2.4bn. In May, a consortium of investors led the private equity group New Mountain Capital bought a 60% stake of the business. This was the largest private equity deal in the history of accounting firms both on the east and west coasts.
According to national rules, the audit divisions of firms must be controlled by local partners. This means that they are ringfenced and at arms’ length. According to sources familiar with the firm’s thinking, Grant Thornton US is confident that it can create significant synergies through the combination of its remaining consulting and tax business with the UK and Irish firms.
This idea is similar to a plan by the Big Four accounting firm EY, which tried last year to combine their consulting and tax advisory business around the world in a new company. The company would then be listed on the US stock exchange. The plan failed due to opposition from the US, which is its largest national company.
Grant Thornton UK refused to comment on this merger plan but stated that it has always looked for “ways that will drive our firm’s growth”. Grant Thornton Ireland issued a similar statement.
Grant Thornton US has declined to comment.
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