Blackstone, a private equity giant, is acquiring a controlling stake in US accounting firm Citrin Cooperman for over $2 billion. This deal signals a surge in valuations within the accounting sector.
A Blackstone -led investor group is buying a majority stake in US accounting firm Citrin Cooperman, in a deal that gives the target an enterprise value over $2bn and marks a significant step up in valuations across the sector. Blackstone has acquired the stake from smaller rival New Mountain Capital, according to two people familiar with the matter, marking the $1tn private capital group’s first deal in an industry undergoing a wave of takeover activity.
In the past three years, a third of the largest US accounting groups have entered the portfolios of private equity funds, with Citrin Cooperman the first firm to change hands twice. The deal will be announced later on Tuesday, according to the people. The Blackstone-led group will have an ownership stake above two-thirds, they said, and will include smaller investors, to keep Blackstone’s stake below 50 per cent and assuage regulatory concerns about the independence of Citrin Cooperman’s audit business. Audit accounts for around 20 per cent of the group’s revenue. More than half of its fee income is from tax work, and around a quarter from advisory work. New Mountain was one of the first major private equity groups to invest in the US accounting sector when it purchased a controlling stake in Citrin Cooperman in late 2021, in a deal that gave the accountancy group an enterprise value of about $500mn. Its sale has been keenly awaited in the sector for a signal on valuations. Two people familiar with the matter said Blackstone was buying Citrin Cooperman at a multiple of around 15 times earnings before interest, taxes, depreciation and amortisation, compared with New Mountain’s initial acquisition at 11 times ebitda. One person familiar with Blackstone’s thinking said the business was a lower-risk proposition than at the time of New Mountain’s acquisition. Private equity ownership has turbocharged merger and acquisition activity in the accounting secto
PRIVATE EQUITY M&A ACCOUNTING CITRIN COOPERMAN BLACKSTONE
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