Cinven leads race to buy Grant Thornton UK stake

The private equity firm Cinven is in advanced talks to buy a major stake in Grant Thornton UK in a deal that would rank among the most significant ever struck in Britain's audit sector.

Sky News has learnt that Cinven is close to agreeing a deal to acquire the shareholding, with sources suggesting on Wednesday that it could be signed imminently.

New Mountain Capital, which owns a big stake in Grant Thornton's US business, was the runner-up in the battle to do a deal.

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They added that if Cinven did emerge victorious from the auction, it would suggest that Grant Thornton's British partners were keen to retain a degree of independence from their transatlantic colleagues.

Estimates during the auction process have suggested that the UK firm would be valued at more than £1.5bn.

Cinven is said to have been negotiating the purchase of a controlling stake.

Other contenders, including EQT, Permira and Carlyle, were eliminated from the process in recent weeks.

Grant Thornton has around 200 UK equity partners, who will have a say on the deal.

The firm has improved its financial performance following a turbulent period for its leadership, with a £1.3m fine being imposed for "serious failings" in 2022 in relation to its audit of Sports Direct, the sportswear empire founded by Mike Ashley and now known as Frasers Group.

It was also handed a £2.3m penalty the year before for demonstrating a "serious lack of competence" in relation to its work on Patisserie Holdings, the owner of the collapsed cafe chain Patisserie Valerie.

Since then, Grant Thornton has slashed the number of so-called public interest entity (PIEs) audit clients, a category which includes banks, insurers and other companies deemed to be of particular importance.

Cinven refused to comment, while Grant Thornton UK could not be reached for comment.

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A spokesperson for the firm previously said: "As all businesses do, we continually evaluate the external business and economic landscape and explore various avenues that will drive growth for our firm.

"This enables us to make informed decisions about what's best for our people, our clients, and our firm.

"No decisions have been made and, whilst we are considering our options, we will not be commenting further."