Grant Thornton’s North American arm is reportedly mulling a merger with its Irish and British entities, marking a major transaction in the consultancy industry. This comes after US-based Grant Thornton sold a significant portion of its business to private equity investors earlier this year, with the aim of accelerating the growth of its tax and consulting branches. The Stateside company has expressed interest in expanding globally by assimilating brands from Grant Thornton’s international conglomerate, according to industry insiders, although these discussions are in early stages.
Despite maintaining a brand uniformity and adhering to universal standards, all national firms under Grant Thornton remain distinctly structured, each controlled by local partners. The proposed merger suggests that present partners of both the UK and Irish factions will become shareholders in an international holding company, which will be helmed by the US-based partners and equity owners of Grant Thornton. The relative values of these firms have not been finalised, leaving the UK and Irish firms with the option to follow unique deals, or none at all, as suggested by those in the know.
In preparation for possible changes, Grant Thornton UK has enlisted Rothschild to examine its business possibilities. Additionally, financial institutes have begun the process of garnering interest from private equity businesses, which may provide an alternative to merging with the American entity. In a similar vein, experts also revealed that Grant Thornton Ireland has recently partnered with Deutsche Bank to launch an exploration of its business options.
The annual reports of the last fiscal year reveal that Grant Thornton UK generated revenues of £654 million and an operating profit of £146 million (€173.5 million), while the Irish venture brought in approximately €300 million in revenue. In the same period, Grant Thornton US reported revenues to the tune of $2.4 billion. The private equity group New Mountain Capital and other investors made the largest investment in the sector, acquiring a 60% stake in Grant Thornton’s US operation for $1.4 billion last May.
Regulations dictate that audit divisions of the firms need to stay under the control of local partners, necessitating a safe distance. However, insiders believe that Grant Thornton US expects considerable synergies obtained from merging its consulting and tax ventures with those of its UK and Irish counterparts.
A concept bearing semblance to a strategy enacted by one of the Big Four accounting giants, EY, previously worked on integrating its consultation and tax advisory sectors internationally into a new entity to be listed on the US stock exchange. However, resistance in the US, where its largest national firm resides, resulted in the scheme crumbling. When approached for a statement about the merger proposal, a representative from Grant Thornton UK chose not to remark, stating instead that the firm consistently seeks opportunities capable of fuelling their growth. Grant Thornton Ireland put across a similar statement while Grant Thornton US refrained from commenting. – This text is protected by copyright under The Financial Times Limited 2024.