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UK accountancy firm MHA has struck a €24mn deal to buy Baker Tilly’s business in Cyprus and Greece just weeks after listing on the London Stock Exchange and vowing to expand by buying other businesses.
MHA said on Wednesday that it would buy Baker Tilly South East Europe, which employs close to 400 staff, as it seeks to strengthen its position in Europe amid a surge of dealmaking sparked by private equity’s interest in the accountancy sector.
MHA, the UK and Ireland arm of Baker Tilly, a network of separately owned tax and accounting firms, floated on London’s Aim in April. The move was a departure from the sector’s traditional partner-owned model and a rare example of a firm opting against taking external equity funding by listing publicly rather than from private equity.
MHA, a top-20 accountancy firm in the UK, said at the time it would pursue cross-border mergers to fuel its growth after the listing.
MHA said it would pay a maximum of €24mn for the acquisition, made up of €6.5mn in cash and €17.5mn in shares, with 10 per cent of the purchase price to be set aside for employees in the South East Europe firm. Shares in MHA were trading 1.2 per cent higher on Wednesday morning, giving it a market capitalisation of £280mn.
Baker Tilly South East Europe sells audit, tax, advisory, legal and corporate services in the region, including in Cyprus and Greece. The firm reported profit before tax of €2.5mn on revenues of €19.4mn for 2024.
Strong growth and stable revenues in the accounting sector have attracted interest from external investors. Private equity groups have been drawn by the opportunity to wring profits from it by consolidating the largest players with smaller rivals.
Baker Tilly’s US arm, which sold a majority stake to a private equity consortium last year, last month announced a merger with Moss Adams that will create America’s sixth-largest accounting firm by revenue, leapfrogging rivals such as BDO and Grant Thornton.
MHA is currently being investigated for its audit of the 2022 accounts of construction group ISG, which collapsed last year leaving more than £1bn of public sector contracts in limbo. It is the second publicly announced investigation into MHA’s auditing by the Financial Reporting Council, the UK accounting regulator.
Geoff Barnes, MHA’s chair, said strategic mergers and acquisitions were “a key component” of the firm’s growth plan.
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