Newsletter Edition 52
Jan 9, 2025
4 min read
Blackstone Leads $2 Billion Deal for Majority Stake in Citrin Cooperman
Blackstone, in collaboration with smaller investors, is acquiring a majority stake in Citrin Cooperman, a U.S.-based accounting firm, in a deal that values the company at over $2 billion, according to a report by the Financial Times. The stake is being purchased from New Mountain Capital, which originally acquired Citrin Cooperman in 2021 for approximately $500 million.
This marks the first instance of a major accounting firm changing private equity ownership twice, reflecting rising valuations in the sector. The Blackstone-led group will hold more than two-thirds of Citrin Cooperman, but Blackstone’s individual stake will remain below 50% to address regulatory concerns over audit independence. Audit services account for 20% of the firm’s revenue, while tax and advisory services contribute over 50% and 25%, respectively.
The deal values Citrin Cooperman at 15 times its EBITDA, a significant increase from the 11-times multiple paid by New Mountain Capital in 2021. Under New Mountain’s ownership, the firm transitioned away from the traditional partnership model and invested heavily in technology, making it a more attractive and lower-risk investment, according to sources close to Blackstone.
Since its 2021 acquisition, Citrin Cooperman has seen revenues grow from $350 million to $850 million in 2024, driven by strategic acquisitions of regional accounting firms. The firm now ranks among the top 20 largest accounting firms in the U.S.
Private equity has fueled a wave of consolidation in the accounting industry, with firms like Citrin Cooperman capitalizing on increased demand for advisory and tax services. The Blackstone-led acquisition underscores private equity’s growing interest in professional services firms as stable, revenue-generating investments.
Citrin Cooperman’s partners are expected to reinvest much of their equity into the firm, with payouts from the sale of shares and opportunities to grow their stakes through performance-based bonuses. This structure aligns with private equity’s focus on incentivizing long-term growth and value creation.
The transaction highlights the continued evolution of the accounting sector and the rising role of private equity in reshaping the industry.
https://www.billboard.com/pro/blackstone-acquires-majority-stake-citrin-cooperman/
Bonaccord Capital Closes $1.6 Billion GP Stakes Fund, Exceeding Target
Bonaccord Capital Partners, a division of alternative asset manager P10, has closed its second general partner (GP) stakes fund at $1.6 billion, surpassing its $1.25 billion target and more than doubling the size of its predecessor fund, which raised $740 million. The fund targets private markets firms managing $1 billion to $10 billion in fee-paying assets across private equity, private credit, real estate, and real assets.
Already 60% deployed, the fund has backed firms including Kayne Anderson Private Credit, VMG Partners, Lead Edge Capital, Park Square Capital, Trivest Partners, Shamrock Capital Advisors, Synova Capital, and Revelstoke Capital Partners.
GP stakes investing has gained momentum as institutional investors recognize the profitability and growth potential of private markets firms, said Bonaccord Managing Partner Ajay Chitkara. “Amid potential consolidation and the recognition of these firms’ profitability, GP stakes have become an exciting investment strategy,” he noted.
This rise parallels an evolving private markets landscape, with increased activity in initial public offerings and consolidations, particularly among private credit managers. Chitkara expects the trend to extend into infrastructure and private equity.
Bonaccord partner Bradford Pilcher highlighted the flexible uses of GP stakes capital, such as portfolio financing, dividend recapitalizations, continuation vehicles, and strip sales. He anticipates continued acquisitions and IPOs of alternative asset managers as single-investment realizations drive activity.
Bonaccord, which manages approximately $5 billion in assets, has also been active in the broader private credit market. In October 2024, the firm sold a 25% stake in private credit lender Monroe Capital to French investment firm Wendel, further solidifying its presence in the sector.
This latest fundraise positions Bonaccord as a key player in the growing GP stakes market, reflecting strong investor confidence in the long-term value of private markets firms.
Apollo and BC Partners to Acquire GFL’s Environmental Services Business in $5.6 Billion Deal
Apollo Global Management and BC Partners have partnered to acquire GFL Environmental’s Environmental Services business at an enterprise value of CAD8 billion ($5.59 billion). The transaction highlights private equity’s growing interest in the environmental services sector, valued for its resilience and growth potential.
Under the deal structure, GFL will retain a 44% equity stake in the business, worth CAD1.7 billion, while Apollo and BC Partners will each acquire a 28% holding. GFL expects to generate approximately CAD6.2 billion in cash proceeds, net of the retained equity and taxes.
GFL plans to use CAD3.75 billion of the proceeds to reduce its debt, targeting a net leverage ratio of 3.0x. The remaining funds, up to CAD2.25 billion, will be allocated to opportunistic share repurchases aimed at enhancing shareholder value.
Craig Horton, Partner at Apollo, described the Environmental Services business as a leader in industrial and waste management services with significant growth opportunities. “With Apollo’s platform and resources, we see opportunities to drive both organic and inorganic growth as an independent entity,” he said.
Paolo Notarnicola, Partner and Co-Head of Services at BC Partners, emphasized the acquisition’s potential for market consolidation. “This transaction positions the business to capitalize on opportunities in the US and beyond, leveraging Apollo’s expertise and BC Partners’ sector knowledge,” he noted.
The deal, unanimously approved by GFL’s board of directors based on a fairness opinion from Canaccord Genuity, is expected to close in Q1 2025, pending customary regulatory approvals.
This transaction further solidifies Apollo’s and BC Partners’ positions in the environmental services sector, building on GFL’s established platform to drive future growth and value creation.