New Mountain Capital buys majority stake in Grant Thornton US
New Mountain Capital, a New York-based private equity firm, has agreed to acquire a majority stake in Grant Thornton LLP (US).
The deal is New Mountain’s second investment in a top-25 US accounting and consulting firm, and is the largest transaction in the post-pandemic wave of private equity interest in CPA firms.
New Mountain in 2022 bought a majority of Citrin Cooperman and subsequently oversaw a series of bolt-on acquisitions to push the firm to $700 million in revenues. A person familiar with the Grant Thornton transaction told the Financial Times that Citrin Cooperman and Grant Thornton will remain separate entities.
New Mountain manages $50 billion in assets and tends to buy privately held business in sectors it believes are insulated from swings in the economy.
Funds from the transaction, as well as additional debt financing, will be used to return capital to current Grant Thornton partners, buy out retirement obligations from former partners, and build a war chest for acquisitions and technology investments.
The deal, for which financial terms were not disclosed, is expected to close in the second quarter of 2024. Upon closing, Grant Thornton will take on an alternative practice structure, splitting its attest and consulting/non-attest businesses into separate entities.
Grant Thornton has approximately 9,000 employees across nearly 50 offices in the United States.
“The investment immediately enhances our value in the marketplace and enables us to accelerate our current strategy,” said Seth Siegel, CEO of Grant Thornton. “We’ll enjoy greater scale, resources and agility, while better positioning the firm to make targeted investments in talent, technology, infrastructure and enhanced capabilities.”
Accounting and consulting partnerships have been increasingly receptive to private equity overtures in recent years, seeing it as a way to boost growth, create more compelling incentive structures for partners and staff, and receive a sizable lump sum of cash.
“Grant Thornton’s unique culture drives the exceptional service the firm provides its clients, and we look forward to working with Grant Thornton to invest further in technology and automation, talent and new service line capabilities to achieve rapid growth — while maintaining an unwavering focus on quality and client experience,” Andre Moura, managing director at New Mountain Capital, said.
Last month, Hellman & Friedman bought a majority stake in Baker Tilly US for approximately $1 billion, and in 2021, TowerBrook Capital Partners invested in EisnerAmper.
