Last week we received a tip that Marcum and CBIZ were “merging.” This seemed highly improbable given Marcum’s recent troubles — large and embarrassing SEC fines, an even larger private equity deal falling apart — but hey, stranger things have happened. So we tweeted it.
Completely unsubstantiated rumor of the day: pic.twitter.com/xNiStHwgnB
— Going Concern (@going_concern) July 24, 2024
Didn’t hear much on the wire after that except a small handful of people who said this could be in the works but couldn’t or wouldn’t offer any information beyond that. Gonna be honest with you here fam, I was sure this was a troll.
IT’S NOT. This press release dropped this morning:
CBIZ, Inc. (NYSE: CBZ) (“the Company”), a leading national provider of financial, insurance and advisory services, today announced that it has entered into a definitive agreement to acquire the non-attest business of Marcum, LLP (“Marcum”), which will make CBIZ the seventh-largest accounting services provider in the U.S. with approximately $2.8 billion in annual revenue.
Concurrent with the closing of this transaction, the attest business of Marcum will be acquired by Mayer Hoffman McCann P.C., a national independent CPA firm with which CBIZ has had an Administrative Service Agreement for over 25 years.
The cash-and-stock transaction is valued at approximately $2.3 billion. It is expected that approximately half of the transaction consideration will be paid in cash and the remainder shares of CBIZ common stock.
CBIZ even explained their reasoning for this transaction, in bullet points no less.
Expected Transaction Benefits Post-Close:
- Market Position: Solidify position as a leading provider of professional services to the growing middle market and seventh largest accounting services provider in the U.S.
- Growth Strategy: Scale accelerates growth and further positions CBIZ as an acquirer of choice
- Our People: Attract and retain the best and brightest in our industries, enhance learning and development aligned to meaningful career paths and expanded growth opportunities
- Client Experience: Offer an unmatched breadth of services and depth of expertise including the development of innovative and actionable solutions
- Industry Expertise: Combined industry knowledge enables access to new sectors and expands presence in target industries
- Innovation and Technology: Enable greater investment in technology to support data-driven insights and solutions while driving innovation, increasing efficiency and enhancing performance
- Shareholder Value: Expect to be accretive in 2025, with an estimated contribution to Adjusted earnings per share of approximately 10%
“Today marks the most significant transaction in CBIZ’s history as we announce our agreement to acquire Marcum,” said Jerry Grisko, President and Chief Executive Officer of CBIZ. “At closing, our company will have combined annual revenue of approximately $2.8 billion, more than 10,000 team members and over 135,000 clients. Together, we will provide a breadth of services and depth of expertise that is unmatched in our industry, allowing us to bring a broader array of high-value solutions to our combined client base. This transaction enables CBIZ to strengthen our presence in key markets, continue to attract and retain top talent, and innovate through technology. We are excited about our future together and the opportunities it will provide our people, the solutions we will bring to our clients and the value we expect it will create for shareholders.”
Jeffrey Weiner, Chairman & Chief Executive Officer of Marcum, said, “CBIZ and Marcum share a dedication to providing high-quality innovative professional services to our clients, and personalized, local client relationships supported by national resources. By joining forces, we will capitalize on our strengths and leverage our similar models to bring more diversified services and even greater subject matter expertise to our clients and attract new business. 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.”
More to come later.
Update 11.1.24: It’s official, the $2.3 billion deal is done.
Related:
Market does not like this deal. Marcum has an SEC chaperone with a shrinking client base and competent audit partner base. Stock is down 16%. Also, CBIZ had a hard time explaining the deal on their bad earnings call.
Seems like these firms are just acquiring whatever they can for the sake of moving up the ranking of ‘largest firms’ regardless of how it will impact work quality. Isn’t the PCAOB supposed to step in when audit quality is being put at risk?
Tweedledee acquires Tweedledum.
Bless their hearts
GT and Forvis must be seething.
The only firm that wants to merge with GT is GT 🤣
And now Andersen tells its people they’re going public?
How long until forvis acquires some other no name firm to get back to top 8?
I wonder if Moss Adams or Plante Moran would ever want to join up with Forvis Mazars. Seems unlikely but so was this deal.
L/BKD (FM), PM, and MA almost merged a few times over the past 20 years. I doubt they will at this point. Seems their cultures are too far apart. I know FM has a fantasy to be a Top 5 US firm but I don’t really seeing them being able to accomplish that at this point.
Now Jeffrey can finally get paid on his massive deferred compensation package. That’s what this is all about. My guess is that he will get some of it upfront and the rest over time. PE was smart to walk away from these clowns a few years ago. Marcum contacts me about every 3 months to try to get me to work there. I would sooner go on welfare or commit suicide.
Just another example of greedy baby boomers getting another payday. CBIZ won’t be able to retain talent.
All the negativity on this site sucks!