Cherry Bekaert, a High 25 Agency based mostly in Richmond, Virginia, grew to become the most recent accounting agency to obtain non-public fairness funding, with a strategic funding Thursday for an undisclosed sum from Parthenon Capital, a PE agency based mostly in Boston.
Numerous different non-public fairness companies have been investing in accounting companies this previous 12 months. As in a number of comparable offers, Cherry Bekaert is splitting its audit facet from its consulting observe. Going ahead, Cherry Bekaert LLP, a licensed CPA agency, will present attest providers, whereas Cherry Bekaert Advisory LLC will present enterprise advisory and non-attest providers. EisnerAmper and Citrin Cooperman made comparable strikes after receiving PE funding (see story). In January, Parthenon acquired RSM US’s wealth administration observe, however RSM US in any other case remained intact.
Michelle Thompson, the present managing companion of Cherry Bekaert LLP, will grow to be CEO of Cherry Bekaert Advisory LLC, whereas Collin G. Hill, who has been managing companion of assurance providers at Cherry Bekaert since 2018, will grow to be managing companion of Cherry Bekaert LLP.
“We’re enthusiastic about Parthenon’s dedication to offer extra funding in know-how, infrastructure and different key areas that can allow us to higher serve our purchasers,” Thompson stated in an announcement Thursday. “We all know our purchasers will share in our enthusiasm as we reimagine the way forward for Cherry Bekaert and the brand new alternatives this restructuring presents for our folks and the communities the place we dwell and work.”
The funding is anticipated to speed up Cherry Bekaert’s progress plans and broaden the vary of its shopper choices.
“We share Michelle’s strategic imaginative and prescient for the way forward for the agency and we’re excited to leverage our trade experience and sources to speed up investments that construct upon Cherry Bekaert’s legacy of making shared success for its folks and purchasers,” stated Parthenon Capital managing companion Andrew Dodson in an announcement. “We’re desperate to collaborate with the Cherry Bekaert group to help continued sturdy progress, each organically and thru strategic acquisitions, that enables the agency to realize its full potential as one of many nation’s main skilled providers organizations.”
Guggenheim Securities LLC acted as sole monetary advisor and Hunton Andrews Kurth LLP served as authorized counsel to Cherry Bekaert. Its group contains Matthew Bosher, Kevin Georgerian, Rachel Northup, Wealthy Warren, Anup Myneni, Jordan Sisco, Scott Austin, Ryan Glasgow, Alex McGeoch, Kim MacLeod, Hillary Patterson, J.C. Chenault and David Baker. Kirkland & Ellis LLP and BakerHostetler LLP served as authorized counsel to Parthenon.
A spokesperson for the agency declined to reveal the quantity of the funding or the monetary phrases of the settlement.
Non-public fairness funding has helped gas merger exercise at a number of companies, together with Citrin Cooperman and EisnerAmper, nevertheless it additionally provoked a warning earlier this month from the Securities and Alternate Fee’s performing chief accountant Paul Munter, who posted a prolonged assertion on the SEC web site in regards to the “important significance of the final commonplace of auditor independence and an moral tradition for the accounting occupation.” Munter warned the SEC Workplace of Chief Accountant has observed “quite a few accounting companies have just lately been participating in more and more advanced enterprise preparations and, in some circumstances, making an attempt to facilitate these preparations by means of restructurings and the usage of various observe buildings. Such preparations have the potential to undermine auditor independence. We warning companies to rigorously contemplate the implications for auditor independence when contemplating various observe buildings, as will the OCA.”
Different accounting companies which have obtained funding from non-public fairness, enterprise capital and different funding companies over the previous 12 months embrace Schellman & Co., RoseRyan, Warren Averett and CFGI.
Cherry Bekaert ranked No. 25 on Accounting Right now’s 2022 record of the High 100 Corporations, with $252.1 million in annual income. Previously, Cherry Bekaert incessantly did M&A offers, however its final publicly introduced deal was in April 2020, when it acquired Tax Benefit Group, a consulting agency in Greenville, South Carolina. In February 2020, Cherry Bekaert acquired Icimo, an information analytics and providers agency within the Raleigh, North Carolina space.