Blackstone acquires accounting firm Citrin Cooperman for $3.2b
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The news: Blackstone is acquiring a majority stake in US accounting firm Citrin Cooperman, in a deal The Financial Times reports values the target at over USD2 billion ($3.20 billion) and marks a sharp rise in its valuation.
The numbers: The deal values Citrin Cooperman at 15 times earnings before interest, taxes, depreciation and amortisation (EBITDA), up from 11 times EBITDA in 2021 when New Mountain Capital acquired it for USD500 million, The Financial Times reported citing two unnamed sources.
Citrin Cooperman’s revenue has surged from USD350 million to about $850 million in three years, driven by acquisitions and making it one of the top 20 largest firms in the US, the paper said citing sources familiar with the figures.
The context: It is Blackstone's first deal in the accounting industry.
The private equity firm's stake in Citrin Cooperman will be kept below 50% through smaller investors to address regulatory concerns about the independence of its audit business, the paper reported.
Audit work accounts for 20% of Citrin Cooperman’s revenue, with the rest from tax and advisory services.
The FT added that Citrin Cooperman partners will roll over most of their ownership but will benefit financially from selling some shares and may increase their stakes over time through performance bonuses.
The acquisition highlights private equity's increasing role in reshaping the accounting industry, with a third of the largest US accounting groups entering the portfolios of private equity funds in the past three years.
What they said: “Blackstone will help us make additional investments in expanded service offerings and technology,” Alan Badey, CEO of Citrin Cooperman, said in a statement.
”We thank New Mountain for their years of partnership in helping to build and support our business."
The sources: FT , Blackstone statement
