Private equity heavyweights CVC Capital Partners and KKR are reportedly showing interest in acquiring a stake in the UK arm of Grant Thornton, the sixth-largest accounting firm in Britain, according to a report by the Financial Times. The report cites unnamed sources close to the matter as revealing that Grant Thornton, advised by Rothschild & Co, has been proactively approaching potential buyers, with a formal bidding process expected to get underway in the coming month. Last year, Grant Thornton, a mid-tier accounting firm, saw its revenue rise by 7% to approximately £654m. Industry insiders suggest that the company could be valued at around £1.5bn, based on historical profit multiples. Any potential deal faces regulatory hurdles, however, with audit firms required by law to be majority-owned by qualified accountants. If a private equity firm were to invest, the auditing division of Grant Thornton might need to be ring-fenced. Despite this, audit partners would likely still maintain financial stakes in the non-audit side of the business. As well as considering a private equity partnership, Grant Thornton has also been contemplating a merger with its American sister firm, which sold a majority stake to private equity investor New Mountain Capital earlier this year. Both CVC and KKR have a history of acquiring service-oriented businesses. In 2019, CVC acquired a majority stake in Teneo, a public relations firm, and later merged it with Deloitte's former restructuring team. KKR, on the other hand, has gradually increased its stake in FGS Global, a PR firm, from 30% in 2023 to 80% this month, valuing the company at $1.6bn (£1.2bn).
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