CBIZ, a financial firm based in Cleveland, and its affiliated accounting firm Mayer Hoffman McCann are acquiring Marks Paneth LLP, a Top 50 firm based in New York, in a megadeal that’s adding an expected $138 million to CBIZ’s annual revenue.
CBIZ is a publicly traded provider of financial, advisory and insurance services, and it will be buying the non-attest sides of Marks Paneth. It operates in an alternative practice structure with the CPA firm Mayer Hoffman McCann, and MHM will be buying the attest assets of Marks Paneth, such as its audit practice. CBIZ and MHM ranked No. 10 on Accounting Today’s 2021 list of the Top 100 Firms, with $824.7 million in annual revenue. Marks Paneth ranked No. 40, with $142 million in total revenue last year, so the deal will add about $4 million in attest services revenue to Mayer Hoffman McCann in addition to the $138 million to CBIZ on the non-attest side. Marks Paneth has over 600 team members, including about 90 partners. Last year, CBIZ and MHM had 335 partners and over 4,000 employees.
In addition to its New York City headquarters, Marks Paneth also has offices in Long Island and Westchester, New York; Parsippany, New Jersey; Philadelphia; Washington, D.C.; and Boca Raton, Florida.
“We have a growth strategy for the firm that we’ve been working on for some time,” said CBIZ president and CEO Jerry Grisko. “That’s to look at geographies and very attractive demographic markets with great profile clients. It’s usually either a city where we don’t have a presence, or where we have a strong presence, but we would benefit from a larger scale. In New York, the metro market and the other markets where Marks Paneth has an office fit that profile. They have a strong presence in Metro New York that is very complementary to our presence in Metro New York. They have offices in Philadelphia, and we have offices in Philadelphia that will benefit from their team joining us. We have an office in Boca Raton, Florida that’s very complementary. They add an office in Washington, D.C. So from a geographic expansion standpoint, we added Washington, D.C., and from a geographic strengthening strategy, we strengthened our presence in Metro New York, in Philadelphia and in Boca Raton, Florida.”
Marks Paneth provides a variety of accounting, tax and consulting services to a wide array of industries, including real estate; construction; hospitality and restaurants; nonprofits; government and healthcare; manufacturing; wholesale and distribution; theater; and media and entertainment.
“Joining CBIZ provides us with an excellent opportunity to leverage the diverse service offerings necessary to address the growing needs of our clients,” said Marks Paneth managing partner Abe Schlisselfeld in a statement. “Our clients will have the ability to benefit from CBIZ's team of talented professionals and the resulting synergies and entrepreneurial spirit will benefit our partners and staff with enhanced leadership and growth opportunities. We are thrilled to join CBIZ and are excited about the growth this will afford the combined firms."
The firms will be able to leverage each other’s strengths. “What we particularly liked about Marks Paneth is that we very much complement each other,” said Grisko. “They’re very strong relative to their size in tax, real estate and not-for-profit. We have all of those things, but we’re relatively larger in attest, family office and payroll. On top of that, we have a substantial number of advisory services that they didn’t have prior to joining us, and they can bring those advisory services to their client base. We also have a sizable private equity practice that they’ve been looking to invest in.”
Koltin Consulting Group CEO Allan Koltin advised both firms on the deal. “In this acquisition, both CBIZ and Marks Paneth found a partner with unique strengths that are complementary to each other,” he said in a statement. “The size and scope of this combination will bring immediate value to existing clients, bolster CBIZ's already stellar reputation and create significant opportunities for growth now and in the future.”
Last September, CBIZ MHM acquired
The deal with Marks Paneth will add to the revenue from those recent combinations. “Between those three practices, we will have added on a run rate of approximately $200 million of revenue,” said Grisko.
He anticipates CBIZ and other large firms will be doing more mergers and acquisitions later this year. “We see it being a great market going forward for us, with lots of other firms that are in the market available,” said Grisko. “They’re having discussions with us and others because clients are looking for a broader array of services, depth of expertise and scale. We were able to bring that, and others are as well. There’s a considerable amount of consolidation and discussions happening in the industry.”
