THE former boss of Deloitte in the UK is working with a private equity house to create a rival to the Big Four.
John Connolly, who was chief executive of Deloitte’s UK operations, is reportedly plotting a string of acquisitions as part of an audacious plan to launch a challenger to his old firm along with PwC, EY and KPMG.
Connolly, who now chairs two FTSE 100 businesses, is working with private equity firm HgCapital, Sky News reported. Filings at Companies House show that Connolly and HgCapital have established Cogital Group.
Sources told Sky News that Blick Rothenberg, a London-based accountancy firm acquired by HgCapital last month, would ultimately become part of Cogital Group. Founded in 1945, Blick Rothenberg has 24 partners and over 200 staff.
HgCapital said the investment in Blick Rothenberg is in line with the business model characteristics that business looks for, including strong client loyalty, high levels of recurring revenue, and high cash flow generation.
The Big Four’s stranglehold on the large company audit market has been criticised by politicians, and new EU audit reforms are aimed at increasing competition at the top end of the market.
However, the FRC has found that the FTSE 350 audit market remains highly concentrated among the Big Four despite high levels of tendering and rotation.
HG Capital and Blick Rothenberg declined to comment. Connolly could not be reached for comment.
The mornings after the night that was the British Accountancy Awards; and Andrew Tyrie's latest thoughts on Making Tax Digital timing
Do you have an investigation looming large over you? Kingsley Napley's Julie Matheson goes through the best strategies to manage the process
Grant Thornton will conduct the audit of Tern following the resignation of Jeffreys Henry
The International Accounting Standards Board (IASB) have announced that Françoise Flores will join 1 January 2017