Grant Thornton partners vote unanimously for private equity option

Grant Thornton office

Accountancy firm Grant Thornton UK has confirmed is it to be owned by private equity investor Cinven.

A meeting of the UK partnership unanimously voted in favour of the deal.

The firm will retain its partnership structure, which will also satisfy the concerns of regulator the Financial Reporting Council, but insists it will benefit from external investment as it eyes £1billion fee income.

The firm record revenues in 2023 of £654m and expects to “comfortably surpass this” in 2024.

With offices in most major UK cities, including Birmingham, Bristol, Leeds, Leicester, Liverpool, Manchester, Nottingham and Sheffield the firm has been exploring new routes to raise external capital.

The move is one of a recent flurry of private equity interest in the sector.

Today, Midlands firm Dains confirmed it has a new private equity partner after IK X Fund took a majority stake in the practice, alongside the management team which is “significantly” re-investing, succeeding Horizon Capital as the majority shareholder.

Last week, Cooper Parry was sold by Waterland to New York-based Lee Equity after two years.

Following a review of its strategic options over recent months, the firm’s partners have unanimously voted in favour of a strategic partnership with Cinven, owing to the two firms’ shared vision for Grant Thornton’s future success and complementary cultures. Cinven is one of Europe’s largest private equity firms and has been investing for more than 40 years. It has raised circa €50 billion funds.

Malcolm Gomersall, CEO of Grant Thornton UK LLP, commented: “The story of our growth journey over recent years has been remarkable. We’ve weathered some of the most significant macroeconomic events in history and we’ve come out of them even stronger, both financially and culturally. The dynamics of our sector, both here in the UK and internationally, have also changed dramatically over recent years. We’re incredibly proud of the firm we are today, and we’re ready to write the next chapter in our story. We recognise 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’re therefore looking forward to partnering with Cinven. We were attracted to their 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.”

Maxim Crewe, Partner and Head of Cinven’s Financial Services Sector team added: “Grant Thornton’s reputation for quality, its stand-out culture and considerable financial performance in recent years provide a very attractive partnership proposition. Through this investment we see considerable opportunity to further enhance the quality of the firm’s service to clients and build and nurture high-performance teams. We’re excited to work with the team as we support Grant Thornton to accelerate the next phase of its growth.”

The firm has also announced plans to introduce an Employee Benefit Trust arrangement for many of its people below Partner grade to benefit from Grant Thornton’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 – thus protecting the future generation of partners over the next few years.

The terms of the proposed transaction between Grant Thornton and Cinven remain confidential. The transaction is expected to complete towards the end of Q1 2025, subject to regulatory approval, and other standard conditions.

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