GRANT THORNTON has signed a binding agreement to acquire a personal insolvency division of RSM Tenon.
The top five firm is expected to pay about £7m for the Individual Voluntary Arrangment (IVA) factory, based in Manchester, with the deal to occur on or before 5 October.
The standalone IVA factory employs about 60 staff. However, a spokesman for Grant Thornton could not confirm whether or not there would be redundancies, because final discussions were ongoing.
The stand-alone outfit generated revenues of about £5m for the year ended 30 June 2012.
Partner and head of the IVA practice at Grant Thornton Mark Allen (pictured) said: "Grant Thornton has considerable experience of the assimilation of such IVA portfolios and consideration for our current and new clients is foremost in our minds.
"It is our aim to make this process as smooth as possible and we look forward to dealing with each and every one of our new clients and welcome them all to our organisation."
RSM Tenon IVA customers will receive a letter from Grant Thornton later this year outlining any changes.
IVAs are a personal insolvency process, which allows a practitioner to consolidate and reduce a person's debt, then arrange and supervise repayments over a contracted period of time – usually five years.
With £5m turnover it's worth more like £15m - congratulations GT!
Posted by: JA, 28 Sep 2012 | 11:01
Not sure how you can say it's a good value or not based just on turnover alone?
Posted by: Mike Grey, 01 Oct 2012 | 08:45
Worth £15m? Tosh! Fees in accountancy firms normally sell for 1.1 to 1.2 times annual income - and that is for practices where there is an 80% retention rate of clients going into the long term. If assume income levels fall from the £5m quoted by the 1/3rd of income based IVAs that normally fail, the ongoing fee income GT can expect is just £3.3m. Then if we assume that the client base is half way through the 5 year IVA term, they've bought just 2 1/2 years of £3.3m income. i.e. 8.25m. And GT have paid £7m for this!. And that's before ongoing and redundancy/merger costs! The deal doesn't make any sense at all to me.
Posted by: Paul Brindley, 01 Oct 2012 | 09:02
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