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The US accounting firm Marcum, which audits more US-listed companies than any firm outside the Big Four, has agreed a takeover by CBiz, America’s only publicly traded accountancy, in a new twist on the consolidation wave sweeping the profession.
CBiz said on Wednesday it would pay $2.3bn for Marcum, about half in cash and half in stock, and the combined group would become the seventh-largest US accounting firm with revenues of $2.8bn annually.
Marcum audits more than 400 US public companies, according to Ideagen Audit Analytics, giving it a market share of 6 per cent. That includes scores of special purpose acquisition companies, a focus of the firm, which contributed significant revenues through the Spac boom of the past four years but also brought controversy. Regulators last year fined Marcum $13mn for quality failures related to its Spac work.
Founded in 1951, the New York-headquartered firm has more than 3,500 staff across the US and revenues of about $1.2bn.
Its sale marks a twist on recent transactions in the rapidly-consolidating sector. Other mid-tier US firms, such as Grant Thornton and Baker Tilly, have opted to sell majority stakes to private equity. A private equity deal for Marcum fell apart in 2022, according to people familiar with the situation.
“CBiz and Marcum share a dedication to providing high-quality innovative professional services to our clients, and personalised, local client relationships supported by national resources,” said Marcum chief executive Jeff Weiner. “By joining forces, we will capitalise on our strengths and leverage our similar models to bring more diversified services and even greater subject matter expertise to our clients.”
CBiz has been growing rapidly through acquisitions by folding in regional accounting firms and adding other professional services businesses, whose services it can cross-sell to clients. Its shares have doubled in the past two years.
On Wednesday, CBiz reported second-quarter revenues up 5.4 per cent to $420mn. Net income fell 26 per cent to $19.8mn as a result of advisory and legal costs related to the Marcum deal and the loss of some insurance business.
Under the terms of the deal, Marcum’s audit business will be folded into MHM, the assurance affiliate of CBiz. US regulators require that audit businesses be owned by professional accountants, meaning they have to be kept at arms length from public or private equity shareholders.
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