It’s a big deal – in every sense of the word.
Cleveland-based CBIZ, a publicly traded accounting firm, has reached a deal to acquire Manhattan-based Marcum, with large Melville operations, for about $2.3 billion, creating the seventh largest accounting and advisory firm in the nation based on revenue.
The combined company will have about $2.8 billion in revenue, 10,000 professionals and 135,000 clients, after the half-stock and half-cash deal closes. And it marks the latest in a long string of accounting mergers.
Marcum CEO and Chairman Jeffrey Weiner in an email to clients said he expects the deal, after approvals, to close in the fall.
Weiner in the letter said the combination will let the firms “capitalize on our strengths, sharpen our insights in a variety of industries, and leverage our similar models.”
“We both have a proven track record of growth through successful acquisitions, and we are excited to bring these two best-in-class organizations together,” said Weiner, who will join CBIZ as a senior advisor to the CEO and will work on strategic initiatives.
Marcum has 43 offices in major markets across the United States, including particularly large Melville operations, and serves more than 35,000 clients.
CBIZ, whose stock is traded on the New York Stock Exchange, is an exception in the world of accounting as a public company in an industry where large firms typically are partnerships.
CBIZ has been growing, becoming the 11th largest accounting firm based on revenue this year at $1.35 billion while Marcum was 13 at $1.325 billion, according to Inside Accounting.
“Today marks the most significant transaction in CBIZ’s history as we announce our agreement to acquire Marcum,” CBIZ President and CEO Jerry Grisko said. “Together, we will provide a breadth of services and depth of expertise that is unmatched in our industry.”
CBIZ indicated that it incurred approximately $6.7 million in fees related to the transaction, but Grisko said he expects the deal to accretive to adjusted earnings in its first full year of operations.
The deal won’t bring all of Marcum’s operations under the CBIZ umbrella. When the CBIZ transaction closes, Marcum’s attest business will be acquired by Mayer Hoffman McCann, an accounting firm with which CBIZ has an administrative service agreement.
Although accounting firms have long advised clients on transactions, they lately have been merging and acquiring, pursuing growth of clients, services and revenues.
This multi-billion-dollar deal, however, stands out in terms of scale and because of the involvement of Marcum, which has large Melville operations.
Carolyn Mazzenga, Marcum’s Long Island office managing partner, in a statement said the deal would “bolster our position as a leading provider of professional services to the growing middle market” and benefit local businesses.
CBIZ has been rapidly growing as a financial, insurance and advisory services provider with over 120 offices and nearly 7,000 employees nationwide, serving organizations of all sizes and individuals.
It in its most recent second quarter, CBIZ reported $420 million revenue, up $21.5 million, or 5.4%, compared to $398.5 million a year ago. Acquired operations contributed $10.5 million, adding 2.6% to second-quarter 2024 revenue growth.
Marcum also has been growing, most recently acquiring Rochester, Mich.-based Croskey Lanni, bringing it into Michigan, while bolstering its capabilities in tax, assurance, technology, and financial advisory and accounting services across the Midwest.
Larger firms also can have an edge in recruiting, continuing to expand. Weiner said the deal will expand “breadth of services and depth of expertise,” including accounting, tax, advisory, business, and insurance “to middle-market clients and attract and retain the best and brightest talent.”
Marcum was founded nearly 75 years ago in 1951 and focuses on entrepreneurial, middle-market companies and high net-worth individuals.
Although the two firms offer many similar services, CBIZ offers employee benefits, property and casualty Insurance, payroll and human capital solutions, and government health care consulting including the administration of Medicaid programs.
CBIZ, which is listed on the New York Stock Exchange, went public on April 27, 1995, and since1997 has been traded under the symbol “CBZ” on the New York Stock Exchange.
Perella Weinberg Partners is CBIZ’s financial advisor and BakerHostetler is its legal advisor on the transaction, while Deutsche Bank is Marcum’s financial advisor and Dechert LLP is its legal advisor for the transaction.
