Grant Thornton is set to acquire New York-listed management consulting firm CBIZ in a proposed $5bn deal. This all-cash transaction, backed by private equity firm New Mountain Capital, is one of the largest of its kind in the accountancy sector.
Under the terms of the deal, CBIZ shareholders are expected to receive $55 per share, which represents a 54% premium over the company’s 30-day average share price. CBIZ, currently the only audit firm listed on the US stock market, has seen its share price fall by nearly 40% over the last year, hitting a low of $24.29 in April.
The acquisition is expected to establish the combined entity as the fifth-largest professional services, tax, and advisory provider in the US, with operations in over 20 countries and nearly $7.5bn in revenue. Following the transaction, CBIZ will cease to be publicly traded and will operate as a private company. CBIZ’s Benefits and Insurance Services segment will be separated into a new, stand-alone entity, also backed by New Mountain Capital.
Jim Peko, chief executive of Grant Thornton Advisors, stated that combining their multinational platform with CBIZ’s market presence will broaden their ability to support businesses. Jerry Grisko, president and chief executive officer of CBIZ, added that joining Grant Thornton Advisors accelerates their vision, creating a stronger firm with new opportunities for team members and enhanced service offerings for clients, while delivering significant value to shareholders.
This deal follows Grant Thornton's UK arm becoming the largest UK professional services business to accept external equity investment, after agreeing to be acquired by private equity firm Cinven. Grant Thornton’s UK equity partners reportedly received a £35.2m payout after this external stake.