A Blackstone-led investor group is buying a majority stake in US accounting firm Citrin Cooperman, in a deal that gives the target an enterprise value over $2bn and marks a significant step up in valuations across the sector.
Blackstone has acquired the stake from smaller rival New Mountain Capital, according to two people familiar with the matter, marking the $1tn private capital group’s first deal in an industry undergoing a wave of takeover activity.
In the past three years, a third of the largest US accounting groups have entered the portfolios of private equity funds, with Citrin Cooperman the first firm to change hands twice.
The deal will be announced later on Tuesday, according to the people. The Blackstone-led group will have an ownership stake above two-thirds, they said, and will include smaller investors, to keep Blackstone’s stake below 50 per cent and assuage regulatory concerns about the independence of Citrin Cooperman’s audit business.
Audit accounts for about 20 per cent of the group’s revenue. More than half of its fee income is from tax work, and about a quarter from advisory work.
New Mountain was one of the first major private equity groups to invest in the US accounting sector when it purchased a controlling stake in Citrin Cooperman in late 2021, in a deal that gave the accountancy group an enterprise value of about $500mn. Its sale has been keenly awaited in the sector for a signal on valuations.
Two people familiar with the matter said Blackstone was buying Citrin Cooperman at a multiple of about 15 times earnings before interest, taxes, depreciation and amortisation, compared with New Mountain’s initial acquisition at 11 times ebitda.
One person familiar with Blackstone’s thinking said the business was a lower-risk proposition than at the time of New Mountain’s acquisition, as management has successfully navigated the transition away from the old partnership model and made significant investments in technology.
Private equity ownership has turbocharged merger and acquisition activity in the accounting sector. Citrin Cooperman had revenue of $350mn when New Mountain bought it three years ago, according to people familiar with the figures. That had since grown to about $850mn in 2024 following a series of bolt-on acquisitions of regional accounting firms, they said, making it one of the top 20 largest firms in the US.
Citrin Cooperman partners will again roll over the majority of their ownership in the firm but will get windfalls from selling some shares, according to people familiar with the Blackstone agreement. Partners were briefed on details of the deal on Monday.
Management are expected to increase their stake over time, through the allocation of performance bonuses.
After the Citrin Cooperman deal, New Mountain last year acquired a majority stake in the much larger US accounting firm Grant Thornton, whose clients tend to be bigger than the small and mid-size companies targeted by Citrin Cooperman. Last week, Grant Thornton US acquired its Irish sister firm in a deal funded by New Mountain.
Blackstone and New Mountain declined to comment.
