EXCLUSIVE: Mid-tier shake up as accountancy consolidator launched today goes after 12 firms

Ian Buckley, chief executive of the consolidator, formed from capital raised by stockbroker Raphael Zorn Hemsley, said he expected a raft of acquisitions to be made during the summer with further additions before the end of next year. He added the number of mid-tier firms is set to shrink over the next five years.

Tenon is expected to announce today that it will launch on the stock market by placing 50,000,000 Ordinary Shares at 100 pence per share submitted to AIM. It also revealed it had been oversubscribed and had to reduce funding from £60m to its £50m target.

The capital raised will be used to acquire ‘high quality’ accountancy practices and alternative advisory businesses in the UK – with the aim of establishing a ‘broadly based business services group.’ Tenon has been engaged in discussions with firms over the last year.

Buckley outlined his admiration of the success enjoyed by the Big Five over the last 10 years but denied Tenon had aspirations to become as large.

‘Big is not necessarily beautiful. Our aim is to change the way professional services are offered in the UK. We will be looking at building up our e-commerce and net-based services. We will also be looking to offer other services such as legal and property, which have not been traditionally offered. Businesses need capital and a wide skill base and that is the environment we are creating,’ added Buckley.

It is understood practices acquired by Tenon will be allowed to retain their own brand, although dual branding is expected to be the most common outcome following an acquisition.

However, the Companies Act 1989 makes it impossible for Tenon to acquire and control audit practices and has decided the audit business of any acquired firm will be ‘transferred to a separate company owned by the previous audit partners of the target practice.’

The directors of Tenon aim to grow the annual turnover of the company through acquisitions and organic growth to £100 million within two to three years.

A finance director has yet to be appointed, but other members of the board include Eric Stobart as non-executive chairman, former Coopers & Lybrand accountant Alan McFetrich as deputy chairman and consultant, with Neil Johnson as non-executive director.

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