Private investment giant Blackstone, in partnership with smaller investors, is acquiring a majority stake in Citrin Cooperman, a US accounting firm, in a deal that values the company at over $2bn, according to a report by the Financial Times.
The stake is being purchased from New Mountain Capital, which originally acquired Citrin Cooperman in late 2021 for an enterprise value of about $500m, and marks the first time a major accounting firm has changed private equity hands twice, signalling a rising trend in valuations across the sector.
The report cites unnamed sources familiar with the matter as revealing that the Blackstone-led group will hold more than two-thirds ownership of Citrin Cooperman, with Blackstone’s stake kept below 50% to mitigate regulatory concerns over the independence of the firm’s audit operations. Audit work accounts for 20% of Citrin Cooperman’s revenue, while tax services and advisory work contribute over 50% and 25%, respectively.
The deal values Citrin Cooperman at approximately 15 times EBITDA, a significant jump from the 11-times multiple paid by New Mountain Capital in 2021. Sources close to Blackstone noted that the firm is now seen as a lower-risk investment, given its successful transition away from the traditional partnership model and substantial investments in technology under New Mountain’s ownership.
Private equity has driven a wave of mergers and acquisitions in the accounting sector. When New Mountain Capital acquired Citrin Cooperman, the firm reported $350m in revenue – a figure has surged to $850m in 2024, fuelled by a series of acquisitions of regional accounting firms.
Citrin Cooperman is now among the top 20 largest accounting firms in the US.
Citrin Cooperman’s partners are expected to reinvest most of their equity into the firm while receiving payouts from the sale of some shares. Management stakes are also projected to grow over time through performance-based bonuses.
