Grant Thornton Advisors actively pursuing network’s Australian business
The Australian branch of accounting and consulting firm Grant Thornton is now in advanced sales negotiations with US-based suitor New Mountain Capital, according to a report in the AFR.
The New York-headquartered private equity firm, which bought a majority stake in Grant Thornton’s US business in early 2024, has since been in a running battle with the UK firm’s now owner Cinven for other chunks of the international advisory.
Adopting the name ‘Grant Thornton Advisors’, the US-led branch has now added around 18 countries to its ‘platform’, with New Zealand among its most recent additions, a move which suggested it might also be keen on acquiring the Australian business.
With Grant Thornton Australia reported to have engaged investment bank Greenhill in October (and another clue provided by private investment executive Jennifer Horrigan recently joining its board), the AFR in its latest update said that, as it understands, the local firm is now in ‘advanced negotiations’ to sell to its US counterpart with the latter undertaking ‘active due diligence’.
While a Grant Thornton spokesperson preferred to remain tight-lipped this time around, one had previously told the publication that the firm had indeed been approached by a number of parties looking to invest, and that it was important to “rigorously evaluate” these overtures in “the context of a dynamically changing professional services sector, both globally and locally”.
Beyond economic pressures on the consulting segment but in part driven by such, some of that shifting dynamic is the move towards consolidation among the various country members of the biggest accounting firms, and the smaller ones, in order to remain competitive and keep pace, in turn having to turn to private equity – which has been sensing an opportunity in the sector.
By way of example, Deloitte recently brought together its EMEA (Europe, Middle East and Africa) member firms to form a €20 billion integrated business, while KPMG has been looking to merge more than 120 separate practices down to as few as 32. Ernst & Young has also proposed a massive global reorganisation, according to reports, so as to create ten ‘super regions’.
On the flip-side, the likes of PKF and Baker Tilly in the US have also secured private equity investments, while Pemba Capital Partners is making a local market play via Victorian accountancy Stannards and BGH Capital has backed ambitious new outfit Nexus Horizon Partners. The moves within Grant Thornton however represent by far the biggest industry ones to date.
Top 10 player
The world’s seventh-largest organisation of its kind, with global revenues of $8.5 billion, is steadily splitting its ownership between New Mountain and Cinven, with the latter picking up Germany and the Czech Republic in addition to the UK, and much of the rest of Europe going to the former, including in large economies such as the Netherlands, France, Spain and most recently Poland.
Should a local deal be struck, it could also end up being one of the accounting sector’s largest ever sales in Australia, and likely the most expensive – or at least much more so than when the Big Four were reportedly sniffing around the firm back in 2019. According to the AFR’s annual rankings, Grant Thornton last year pushed beyond the $380 million revenue mark, up by seven percent.
