The proposed sale of British accounting practice Xeinadin has been put on hold after bids failed to meet the more than £1 billion ($1.36 billion) valuation sought by its private equity owner, the Financial Times (FT) reported.
Exponent, the U.K. buyout firm that invested in Xeinadin about four years ago, hired Evercore last summer to run a competitive auction.
People familiar with the conversations told the publication that the interest did not translate into offers at the level Exponent was seeking, leading to the decision to end the sales effort.
Advisers interpret the abandoned process as a sign that the recent boom in private equity deals for professional services firms may be running up against valuation constraints.
According to the report, accounting networks in the US, UK and Europe have attracted significant attention from buyout funds, driving multiple deals as investors sought to build larger platforms from smaller practices.
Many sponsors have followed a buy-and-build model, acquiring local tax and accounting firms and then standardizing systems and investing in technology to improve margins and attract larger clients.
However, some have struggled to generate the returns originally anticipated, leading several investors to question whether prices in the sector have been inflated.
Xeinadin was created in 2019 by combining more than 100 independent accounting practices and has continued to expand through new acquisitions.
The company has more than 130 offices in the UK and Ireland and employs around 2,500 people.
It offers auditing, corporate finance, tax and a range of other professional services to small and medium-sized businesses. Last month, Xeinadin acquired Grunberg to expand its presence in London, UK.
“Xeinadin auction called off after buyers reject £1bn valuation” was created and originally published by International Accounting Bulletin, an imprint owned by GlobalData.
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