The flurry of M&A activity, which kicked off soon after the turn of the millennium, has slowed lately but last week’s news that Vantis has received an approach sent the pulses of those who care about this sort of thing racing.
If,as market rumours have suggested in the last few days, it is fellow consolidator Tenon that has made the approach, it will be a remarkable turn of events.
A US phenomenon, consolidators have only been active on this side of the pond since 2001.Yet their wildly changing fortunes have ensured acres of news coverage.
Numerica was the first on the UK scene and thrived initially, foundered until it was finally bought out by Vantis.
Tenon has enjoyed and endured similar highs and lows but is emerging as the sector’s great survivor. Especially if it succeeds in its apparent pursuit of Vantis.
Is it a prize worth winning? Certainly. The revenues of a combined Tenon-Vantis would top the symbolic £200m mark and thrust the firm into the Accountancy Age Top 50’s top ten.
But it will mean the death of the consolidator model, though some say that dream died some time ago.
If Tenon keeps acquiring it will be just another firm on a buying spree.If another consolidator emerges it’s hard to imagine it gaining momentum.
Even if it were to achieve the impossible and acquire all the independent practices in the UK,it may match the Big Four by revenues but it would never be a truly integrated rival.
As one mid-tier senior partner said this week: ‘If all the corner shops in the country merged they would be as big as Tesco – but they still wouldn’t be Tesco.
’That’s not just a challenge for consolidators – but all the mid-tier.
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