Top 50+50 Accountancy Firms 2024: Market consolidation continues at pace

The number of firms that have bought or sold part of a firm in the last financial year has risen to 35.

Accountancy Age’s Top 50+50 Rankings, in partnership with Source Advisors, saw the number of firms falling into this category rise from 33 to 36.

In 2023, almost 25% of those reporting they had sold or acquired a firm ranked in the top 20. A year later this percentage had risen to 28%, signalling a rise in consolidation amongst the upper echelons and the mid-market.

Evelyn Partners is one firm that has been snapping up prospects at a rapid rate. Since its 2023 entry, the firm completed the purchase of Creaseys Group Ltd, a Tunbridge Wells-based accountancy and tax advisory firm with particularly strong expertise in advising private equity professionals. In November 2023, the firm acquired Harwood Hutton, a well-established, multi-disciplined firm of accountants and tax advisers headquartered in Beaconsfield.

Highest new entrant Sumer has also had a fruitful year in terms of M&A. The firms’ strategy has revolved around acquiring only leading regional practices that share the same ethos, values and their approach. This in turn has formed regional Hubs throughout the UK, focused on the SME market. In the past financial year, Sumer has acquired Jerroms, Simmons Gainsford, Carpenter Box, EQ Accountants, Cowgills, Scrutton Bland, Sumer Northern Ireland, Douglas Home & Co, ASM Belfast and DPC Chartered Accountants.

Rising challenger BKL has also gained several firms in recent months. In May 2023, the firm acquired Landau Baker, followed by CFPro Limited in December 2023.  This year, the firm acquired Alan Heywood & Company in March and Wilson Wright in April. As a result of it’s latest acquisition deal, the combined business will have two well-established bases in London: BKL’s office in north London and Wilson Wright’s office in central London. Together the firms have a team of over 400 people, including 39 partners, and a combined turnover of £46 million (as of April 2024).

SMH Group was the lowest ranked firm to have reported acquisitions. Howard Matthews Partnership merged into the SMH Group in January 2024, followed by Sheards Accountants later in the year. The firm has risen from #86 to #82 in this years rankings.

There were also a few firms which decided to divest part of their business. Bishop Flemming decided to divest its Payroll Bureau to IRIS Payroll.

Similarly, Haines Watts sold its London branch to Cooper Parry in September 2023 and its Altrincham office to DJH in October 2023. Earlier this year, the firm also announced it had sold three of its norther offices (Leeds, Manchester and Newcastle) to Evelyn Partners; the firm still retains 37 offices across the UK.

Activity among the Big Four

Both PwC and KPMG reported undergoing M&A activity in 2024 – data was not provided by EY or Deloitte.

Dominating headlines earlier this year, KPMG UK entered a notable merger with KPMG Switzerland. This merger, effective October 1, 2024, combines both firms into a new $4.4 billion business, creating the second-largest firm within the global KPMG network.

Meanwhile, PwC sold its UK Marketing and Media Owner division to MediaSense.

The arrival of private equity

Private equity investment has undoubtedly had an impact on the make-up of the 2024 50+50 list. New entrants like Sumer, and significant moves by other firms, have been heightened by the involvement of PE.

Only last month, Grant Thornton announced private equity firm Cinven was taking a majority stake ownership in the firm. This was despite bids from it’s sister US firm. Grant Thornton will join a growing list of firms within 50+50 who have recently taken PE investment – these include (but are not limited to):

• Sumer: Established in early 2023 with substantial private equity backing from Penta Capital and BlackRock. The firm focuses on supporting small and medium-sized enterprises (SMEs) across the UK and Ireland.
• Evelyn Partners: Formerly known as Tilney Smith & Williamson, Evelyn Partners has been backed by private equity firms Permira and Warburg Pincus. In 2024, Permira considered selling its majority stake, highlighting ongoing PE interest in the firm.
• BKL: The firm secured PE investment from CBPE Capital in April 2023 to help support its growth ambitions. Notably, in April 2024, BKL merged with Wilson Wright, a City of London-based accountancy firm, resulting in a combined entity with over 400 employees.
• Shaw Gibbs: In November 2022, the firm received £10 million from Apiary capital to support the firm expand through targeted M&A. Notable mergers include those with DNG Dove Naish and Harmer Slater in December 2023, and with Alliotts LLP in September 2024.
• Xeinadin: In May 2022, Xeinadin, a professional services group operating across the UK and Ireland, formed a strategic partnership with Exponent Private Equity. Exponent made a significant minority investment to support Xeinadin’s ambitious growth plans and further investments in data-driven technologies.
• Dains Accountants: In 2021, Dains received investment from Horizon Capital, a private equity firm specializing in business services. This partnership aimed to accelerate Dains’ growth through strategic acquisitions and expansion of service offerings.
• DJH: In 2021, DJH secured investment from Tenzing, a private equity firm focused on high-growth businesses. This investment was intended to support DJH Mitten Clarke’s expansion plans and enhance its service capabilities.
• Cooper Parry: In October 2024, mid-market accountancy firm Cooper Parry explored a sale, potentially fetching up to £600 million. The firm had previously sold over 50% of its stake to Waterland Private Equity in 2022.

However, this trend has raised concerns among regulators. The Financial Reporting Council (FRC) has expressed apprehension that PE ownership could prioritize short-term gains over audit quality and public interest. Consequently, the FRC has mandated that accounting firms report any approaches from PE investors to ensure transparency and maintain industry standards.

Despite regulatory scrutiny, the influx of PE investment is anticipated to drive significant changes in the UK accounting landscape, potentially leading to increased consolidation and innovation within the sector.