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Rebranded group runs out of Optionis | accountingweb
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Rebranded group runs out of Optionis

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While the decision to rename the group of firms at the heart of last year’s ransomware attack was an obvious one, it raises a standout question: how much damage can be done to an established accounting brand before it needs to be changed?

13th Apr 2023
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An intriguing press release dropped into my inbox the other day, bearing news that Optionis had rebranded to Caroola Group.

For those not familiar with the revolving door of accountancy brands, Optionis was the group behind a plethora of household names, including contractor specialist SJD Accountancy and online accounting practice Nixon Williams (which it acquired in a deal worth more than £100m), ClearSky Accounting and First Freelance, umbrella firm Parasol, and tax refund shop Brian Alfred – all of whom will now operate under the Caroola name.

According to the press release, the name change is a “culmination of a two-year transformation project that focused on building innovative technology to unlock market-leading service levels, delivered through one brand,” with the new group “dedicated to further building on the company’s ethos of providing a customer-centric, modern approach to accountancy for the self-employed community”.

Ransomware attack

Pushing the word salad to one side, the release has a few key omissions. Most notably the fact that in January 2022, Optionis suffered one of the largest ransomware attacks the accounting industry has ever seen.

The hack, precipitated by ransomware gang Vice Society, knocked out Optionis’s systems and saw accounting clients unable to access information ahead of self assessment and VAT return deadlines, left umbrella clients unpaid, and eventually culminated in client details released on the dark web.

With complaints on contractor forums and one-star reviews for its brands racking up (coupled with the fact the group lost £25m in its last financial year and shed thousands of accounting clients), the rebrand was pretty much inevitable – even if it does leave a bad taste in the mouth of clients treated badly and left in the dark following the hack.

Damage limitation

This leads to some broader questions for the accounting market: how much damage can be done to established, credible brands before they have to be ushered out into the barn and given both barrels? Should firms look to stick it out and recover their reputations, or look to move on at the earliest possible opportunity? This obviously depends on a huge number of variables, including the size of the transgression, market share, whether they have any intellectual property or fancy tech tied up in the brand, and many other factors.

The rise and fall of cryptocurrency was a veritable case study in pulling the rip cord. While firms initially scrambled to cater for the next big thing in accountancy, they were also just as quick to disengage when the going got rough. US auditor Armanino disbanded its crypto audit practice following worries from their core audit clients that they’d be caught up in the contagion surrounding the FTX fallout.

And bringing us right up to date, Johnston Carmichael may be a household name for accountants north of the border, but its association with the SNP (and the subsequent search engine results this will generate ) may mean the firm takes on its Moore Global mothership colours sooner rather than later.

Favourite brands

But if accountancy watchers are worried about some of their favourite brands going the way of Woolworths and Opal Fruits, there’s good news – due to the complex nature of its global networks, it’s harder than you think to kill off an accounting brand completely. 

Even being at the heart of a global financial meltdown wasn’t enough to wipe out the Arthur Andersen brand, which lives on in various guises around the world, while RSM Tenon’s first three initials survive to this day near the top of the largest accounting firm charts. Whether Optionis or the other brand names that went down in its wake return remains to be seen.

Caroola was asked to comment on this piece but has not responded – although the press release mentioned has been published in full on several accounting and business news sites.

Replies (8)

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By Hugo Fair
13th Apr 2023 18:53

I'm certainly not worried about any accountancy brands going the way of Opal Fruits ... since none of them could truthfully say they were "Made To Make Your Mouth Water"!

Anyway I'm not so sure that "it’s harder than you think to kill off an accounting brand completely" ... Touche Ross, Peat Marwick McLintock, Coopers & Lybrand - I could go on listing departed behemoths.

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By waldorf
14th Apr 2023 13:06

SJD & Nixon Williams were not sold for more than £100 million, the total price was far below this sum.

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Replying to waldorf:
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By Hugo Fair
14th Apr 2023 13:40

Don't know the specifics of this particular deal ... but the 'selling price' and the 'total cost of acquisition' can be quite different beasts (depending on the circumstances)!

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Replying to Hugo Fair:
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By waldorf
14th Apr 2023 14:44

Hugo Fair wrote:

Don't know the specifics of this particular deal ... but the 'selling price' and the 'total cost of acquisition' can be quite different beasts (depending on the circumstances)!

The specifics are disclosed in Note 11 of the accounts of Arkarius Group (period ending 31/10/14) now Caroola Group, a total sum of £81.8m was paid for both NW & SJD, including a deferred £15m to the SJD owner. It’s not clear that this deferred payment was ever paid due to the financial restructuring.

The often touted £100m was because someone wanted to ‘big’ up the number. The PE company agreed that it could be used as it could cover future acquisitions!

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Replying to waldorf:
Tom Herbert
By Tom Herbert
14th Apr 2023 15:07

Thanks for the information (and the opportunity to stroll down memory lane) Waldorf. Writing these types of op-eds is always fraught with danger - include too little information and be accused of inaccuracy, include too much and ruin the flow of the piece. Given the PE group's own release about it (link below) proclaimed £100m I thought I was on relatively firm ground, but perhaps your comments can help clarify things for those seeking more details.

All the best,

Tom

https://www.sovereigncapital.co.uk/news/sovereign-creates-leading-accoun...

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Replying to TomHerbert:
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By Hugo Fair
14th Apr 2023 16:30

Hardly your fault, Tom, especially as a passing reference within the rest of the article ... but I fear you were indeed hooked by the PR spinners.

Following the URL you've kindly provide takes you to:
"Sovereign Capital .. is pleased to announce that it has completed its simultaneous investments in SJD Accountancy (“SJD”) and Nixon Williams in a transaction worth £100m."

Note the careful use of "worth" - unspecified by whom or in what context!

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Replying to Hugo Fair:
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By waldorf
14th Apr 2023 16:44

Hugo Fair wrote:

Hardly your fault, Tom, especially as a passing reference within the rest of the article ... but I fear you were indeed hooked by the PR spinners.

Following the URL you've kindly provide takes you to:
"Sovereign Capital .. is pleased to announce that it has completed its simultaneous investments in SJD Accountancy (“SJD”) and Nixon Williams in a transaction worth £100m."

Note the careful use of "worth" - unspecified by whom or in what context!

Nobody is blaming Tom, but clearly the PR did get carried away. One thing we can agree is that the businesses are no longer worth anything like £100m now.

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By waldorf
14th Apr 2023 13:08

Perhaps the rebrand is connected to the fact that the bank who financed the group has taken control from the original PE owners?

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