A wave of consolidation among mid-tier firms was signalled this week with the launch of the UK’s first accountancy consolidator, Tenon. Ian Buckley, chief executive of the consolidator, formed from capital raised by stockbroker Raphael Zorn Hemsley, said Tenon aimed to grow through acquisitions and organic growth to a #100m turnover business within two to three years. Buckley predicted Tenon would acquire 12 mid-tier firms over 18 months. He expects to make a raft of acquisitions during the summer with additions before the end of next year. Tenon will not be able to acquire and control audit practices. The audit business of any acquired firm will be ‘transferred to a separate company owned by the previous audit partners of the target practice’. 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. Buckley said Tenon had raised #50m through a share placing and will now list on the Alternative Investment Market. He added the offer had to be discounted after it was oversubscribed by #10m. The capital raised will be used to acquire ‘high quality’ accountancy practices and alternative advisory businesses – with the aim of establishing a ‘broadly based business services group,’ Buckley said. As revealed by Accountancy Age in December, Tenon has been in discussions with mid-tier firms over the past year. But Buckley denied aspirations to rival the Big Five. ‘Big is not necessarily beautiful,’ he said. ‘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, which have not been traditionally offered. Businesses need capital and a wide skill-base and that is the environment that we are creating.’
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