Grant Thornton Ireland, the fifth-largest accounting firm in the State, is working with investment bankers from Deutsche Bank on its future strategy after fielding numerous approaches from private equity firms that are swarming the sector globally, according to sources.
Among options being assessed was a potential merger between the non-audit parts of the firm with the same areas of Grant Thornton US, which itself was subject to a private equity deal in May, and Grant Thornton UK, they said.
The Financial Times first reported the potential three-way tie-up on Thursday.
The Irish firm, which generated about €300 million of revenues last year, is the fifth-largest part of the global Grant Thornton network. The US and UK firms are the largest and second-biggest members.
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Sources said Grant Thornton Ireland, which has about 3,000 staff and 72 partners, hired Deutsche Bank in May to advise on its options after being approached by a number of private equity firms. It is expected that the outcome of the review will emerge in the early autumn.
A spokeswoman for Grant Thornton Ireland declined to comment.
Grant Thornton US’s non-audit business became the largest accounting firm to sell a piece of itself to private equity in May when New York-based New Mountain Capital acquired a 60 per cent stake in it for $1.4 billion (€1.3 billion).
Laws in the US, UK and Ireland require that the audit divisions of accounting firms are majority owned by local partners, which has added a layer of complexity to a recent wave of deal-making across the sector internationally.
It emerged earlier this month that Grant Thornton UK had hired Rothchild to advise on its options.
The small- to mid-tier Irish accounting sector has seen a surge in deal making in the past 18 months as overseas firms, often backed by private equity money, seek to tap into the EU’s fastest growing economy and the European base for a host of global tech and pharmaceutical groups.
The attraction of private equity to the sector lies in the fact that much of accounting revenue is recurring, which makes it easier for private equity firms to fund borrowings in takeover transactions.
For small domestic practices, the burdens of mounting regulation and compliance, technology costs and succession planning are also driving consolidation conversations in the sector.
Recent activity at firms within Grant Thornton internationally comes a little over a year after Big Four giant EY abandoned plans to combine its consulting and tax advisory businesses around the world into a new company that would have been floated on Wall Street. The plan fell through because of opposition in the US, its largest national firm.
Grant Thornton Ireland, which has nine offices here, added 800 roles in 2023 to bring its total workforce to 3,000 as turnover hit €300 million for the first time. The Irish business can trace its history back to 1899, when the earliest founding firm, Kinnear Company, was formed.
The Irish firm’s audit practice was in the headlines in May when it agreed to pay $19.3 million in a settlement to resolve a legal action over its audit work – together with Grant Thornton Cayman Islands – on a failed US investment advisory firm, called TCA Fund Management.
Grant Thornton Ireland stressed that the payments were made without an admission of liability or wrongdoing, and were being made to avoid “prohibitive legal defence costs in the US and Cayman Islands”.
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