Grant Thornton deal continues the private-equity investment trend

Another large public accounting firm has struck a deal with a private-equity investor — one that ranks as the biggest yet in the continuing industry trend.

Top 10 firm Grant Thornton LLP has announced a “significant growth investment” with New Mountain Capital LLC, the second private-equity investment in a top 10 firm in 2024 and the fifth involving a top 25 firm in the last two years.

“Our partnership with New Mountain Capital empowers Grant Thornton to deliver transformational, high-quality outcomes for our clients, our talented team members, and the industry as a whole,” Grant Thornton CEO Seth Siegel said in a news release. “The investment immediately enhances our value in the marketplace and enables us to accelerate our current strategy. We’ll enjoy greater scale, resources, and agility, while better positioning the firm to make targeted investments in talent, technology, infrastructure, and enhanced capabilities.”

In February, top 10 firm Baker Tilly US LLP announced a deal with private-equity firms Hellman & Friedman and Valeas Capital Partners.

In 2022, top 25 firms Cherry Bekaert LLP and EisnerAmper LLP announced deals with private-equity firms around the same time that New Mountain Capital made an investment similar to the Grant Thornton deal by purchasing majority ownership in top 25 firm Citrin Cooperman.

In the news release announcing the Grant Thornton deal, New Mountain Capital managing director Nikhil Devulapalli said, in part: “We look forward to helping the firm expand its service offerings and execute on strategic acquisitions to continuously grow its platform.”

According to the release, regulatory approval is expected in the second quarter of 2024. Once the deal is official, Grant Thornton will operate in an “alternative practice structure,” with Grant Thornton LLP, a licensed CPA firm, providing attest services and Grant Thornton Advisors LLC providing business advisory and nonattest services.

Allan Koltin, CPA, CGMA, head of the Koltin Consulting Group in Chicago, told the JofA last year that more than half of the top 20 accounting firms were in “some type of transformative discussion.”

In that JofA article, Barry Melancon, CPA, CGMA, the CEO of AICPA & CIMA, said in a written statement:

“The fact that private equity is interested in the profession is a statement about the importance of the profession. That’s a good third-party validation. We are seeing lots of private-equity activity but also tremendous numbers of traditional merger deals among firms. This demonstrates choice and different approaches for firms, which is always good as long as the focus on quality remains paramount.”

For more of Melancon’s analysis, read the transcript or listen to his recent JofA podcast interview.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.