Permira drops pursuit of $1.2B U.K. accounting firm Cogital

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Private equity firm Permira has dropped its pursuit of a stake in CogitalGroup Ltd., jeopardizing a sale process for the U.K. accounting firm, people familiar with the matter said.

Permira walked away from exclusive negotiations following disagreements over price with Cogital’s owner, rival buyout firm Hg, one of the people said. A deal could have valued London-based Cogital at about 1 billion pounds ($1.2 billion), the people said, asking not to be identified because the information is private.

Cogital has been headed John Connolly, Deloitte’s former global chairman, since it was started in 2016. The company was formed through the merger of Nordic software firm Azets with U.K.-based accounting firms Baldwins and Blick Rothenberg and has grown through more than 45 acquisitions, according to Hg’s website.

Hg could decide to seek other exit options, such as selling a stake to a different suitor or conducting an initial public offering of Cogital, the people said. It could also opt to keep the business for longer, according to the people. Representatives for Permira and Hg declined to comment.

In addition to accounting services, Cogital also handles payroll and invoice outsourcing, financial reporting, human resources and recruitment for its clients. The company has annualized revenue of about 453 million pounds, including contributions from companies it’s agreed to buy, according to its 2018 annual report.

It generates annualized earnings before interest, taxes, depreciation and amortization of about 68 million pounds. Cogital has net bank debt of about 343 million pounds at the end of October 2018, the report shows.

Bloomberg News
International accounting