CVC Considers Buying Stake in Grant Thornton UK

CVC Capital Partners, the private equity firm behind Six Nations Rugby, is reportedly preparing to bid for a controlling stake in Grant Thornton UK, one of Britain’s largest audit firms. This potential acquisition, valued between £1 billion and £2 billion, could mark a significant shift in the UK’s professional services landscape. The bidding process is still in its early stages, with CVC facing competition from various other private equity firms. Concerns have been raised regarding the implications of CVC’s ownership of both Grant Thornton and Teneo, its financial restructuring business, which could lead to conflicts of interest. Since acquiring Teneo in 2019, CVC is anticipated to seek an exit from the business within the next few years. The backdrop of this potential deal includes heightened scrutiny of the audit industry following scandals involving major companies, which has led to calls for stricter regulations. Despite previous attempts at audit reform failing to materialize, recent discussions in the King's Speech suggest a renewed focus on tougher audit regulations. Grant Thornton itself faced a £1.3 million fine in 2022 for significant failings in its audit of Sports Direct, prompting improvements in audit quality. The firm is currently exploring various options for its UK operations, including the possibility of separating its audit business from the sale. A spokesperson for Grant Thornton UK LLP emphasized that while they are evaluating the business landscape, they are not actively pursuing any transactions at this time. Meanwhile, the firm’s US counterpart has already sold a majority stake to New Mountain Capital, indicating a trend of consolidation in the sector.