Last year marked a momentous shake-up in Ireland’s professional services landscape with the €500m sale of Grant Thornton’s Irish auditing and tax operations to its US affiliate in a deal backed by New Mountain Capital. The scale of the deal, coupled with the arrival in recent years of new entrants such as Interpath and Azets, underscores the ongoing transformation of the sector. Consolidation is accelerating, fuelled by global trends, local dynamics and private equity interest. Could the next 12 months bring more transformative deals?
Globally, audit and advisory firms are navigating increasing regulatory scrutiny, particularly in the UK, where the Big Four have cut costs and streamlined operations. Moves such as reducing non-core services and implementing stricter boundaries between audit and advisory work have been necessary to meet compliance requirements. EY may have shelved its ambitious plan to split its audit and consulting businesses, but it highlights the need for some firms to rethink their business models.
Ripe for investment
Ireland’s firms face fewer of these regulatory pressures but are not immune to global currents. The fragmented nature of the domestic market, where smaller firms dominate regional towns, creates consolidation opportunities. Many smaller practices are at a crossroads: owners nearing retirement are seeking to cash in, while others are looking to sidestep succession challenges. This is where private equity sees an opening.
Ireland’s audit and advisory market is fragmented, stable and ripe for investment
Ireland’s professional services market is uniquely positioned for consolidation. The country’s strong economic growth and its role as a hub for multinationals create a steady demand for auditing, tax and advisory services. Fast-growing Irish-owned businesses also need an increasing array of services.
Private equity investors have been highly active in fragmented professional services markets worldwide. They are drawn to businesses with recurring revenues and stable client relationships, where scale offers the potential to grow profits. In Ireland, that interest has played out in a string of deals creating national brands in sectors from financial advisory to insurance brokerage. The M&A trend has extended to law firms and even veterinary practices.
The audit and advisory market presents a similar profile: fragmented, stable and ripe for investment.
Mid-sized players are diversifying to remain competitive
Wave of M&A
The Grant Thornton sale wasn’t an isolated event. The acquisition of Friel Stafford by Ifac in 2023 demonstrated how mid-sized players are diversifying their offerings to remain competitive. Similarly, Interpath’s arrival in Ireland in 2022 reflects an appetite for challenging established firms by focusing on niche areas such as restructuring and advisory services. Azets, a growing force in the sector, has been actively acquiring smaller firms to build scale and extend its reach.
At the same time, the sector is grappling with transformational technological and regulatory challenges. Mid-tier firms in Ireland are already positioning themselves to compete, joining forces to gain scale and share resources.
Small firms may have to join larger networks or be left behind
All this activity mirrors developments across Europe and the US, where mid-tier firms are banding together to compete with the global giants. In the UK, BDO’s merger with Moore Stephens in 2019 served as a template for how scale can work. Ireland may be set for similar moves, with private equity and corporate buyers eyeing opportunities to consolidate the sector.
Reshaped landscape
The future of Ireland’s audit and advisory landscape will likely be defined by those who can adapt successfully to these changing dynamics. For smaller firms, the choice may be to join larger networks or risk being left behind. For larger players, the challenge will be balancing growth ambitions with the need to navigate an increasingly complex operating environment.
As the industry reshapes itself, one thing is clear: professional services in Ireland are in the midst of a profound transformation.
