CBIZ Inc., a Top 25 Firm based in Cleveland, is acquiring Marcum LLP, a Top 25 Firm based in New York, for $2.3 billion in a cash-and-stock deal, making the combined firm what is projected to become the seventh largest accounting firm in the U.S. with approximately $2.8 billion in annual revenue.

CBIZ, which is a publicly traded company, is acquiring the nonattest assets of Marcum. Concurrent with the closing of the transaction, which is expected in the fourth quarter, Mayer Hoffman McCann P.C. is acquiring the attest assets. MHM is a national independent CPA firm with which CBIZ has had an administrative service agreement for over 25 years.

Approximately half of the $2.3 billion transaction consideration will be paid in cash and the remainder in shares of CBIZ common stock.

CBIZ and MHM together ranked No. 11 on Accounting Today‘s 2024 list of the Top 100 Firms. CBIZ reported $1.6 billion in annual revenue last year. Marcum ranked No. 13 and has approximately $1.2 billion in revenue and more than 3,500 professionals. Combined, CBIZ will have more than 10,000 team members and over 135,000 clients. CBIZ provides finance, insurance and advisory services in more than 120 offices in 33 states, while Marcum has 43 offices in major markets across the U.S.

“Today marks the most significant transaction in CBIZ’s history as we announce our agreement to acquire Marcum,” said CBIZ president and CEO Jerry Grisko in a statement Wednesday. “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.”

Neither firm was under pressure to merge, but as their competitors grow, they saw opportunities for joining together.

“We’ve both enjoyed a lot of success and revenue, but the combination of these two was just too good to pass up and accelerates our growth strategy to become the firm of choice to the market,” said Chris Spurio, president of CBIZ Financial Services, in an interview with Accounting Today.”

The two firms had been in talks about a combination. “We’ve been talking to them for a very long time, but things really started ramping up late in 2023,” Spurio added. “We’ve been at it since then, culminating in the announcement today.”

Integration is being carefully planned. “We have a very thoughtful integration plan that we’ve been working around,” said Spurio. “Initially it’s going to be focused on our clients. It’s also going to be about aligning those mission critical platforms and systems. We’re colocated in many markets, getting those teams together and starting to build those relationships so we can go to market as an organization that will now be the seventh largest in the U.S. But the integration will happen in a plan that will span over 18 to 24 months and has several phases to it. It’s thoughtful, but ambitious as well. We will continue to serve our clients with the same level of service they have come to expect throughout the process.”

The firms may not be expanding geographically right away since they already both have huge footprints. “Geographically, they have 43 offices located in the Northeast, New York metro, D.C., Florida and California, and that is where we are co-located,” said Spurio. “It just allows us to scale up dramatically in those markets. For example, if you think about our New York metro and New England practices, those will instantly double, and our mid-Atlantic — Philly, Pennsylvania and Maryland — those quadruple. Our Florida and California practices scale up significantly as well. It’s not so much new markets, but adding tremendous size, scale, expertise and industry knowledge to many of the markets that we provide. And they’re interested in a lot of the markets we’re in that they’re trying to get in — think Kansas City, Salt Lake City, Denver — that we have. I think it’s a very interesting combination from that perspective.”

There will be more opportunities for employees and clients as well. “Both organizations are really excited about the opportunities,” said Spurio. “We’ll be able to provide the clients the kind of services and solutions they need and provide our employees with the kind of experiences and career paths that they want.”

Founded in 1951, Marcum provides a variety of professional services, including tax, attest, accounting, and advisory services, as well as technology solutions and executive search and staffing services for entrepreneurial companies, midcap and micro-cap SEC registrants, and high-net-worth individuals. 

“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,” said Marcum chairman and CEO Jeffrey Weiner in a statement. “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.”

In an email to clients, Weiner added, “This strategic acquisition presents an incredible opportunity for CBIZ and Marcum to bring together the best talent in the industry to offer our clients an exceptional breadth of services and depth of expertise. Together, we’ll become the seventh-largest accounting and advisory services provider in the nation. Our combined force will deliver exceptional accounting, tax, advisory, business, and insurance services to middle-market clients and attract and retain the best and brightest talent.”

Allan D. Koltin, CEO of Koltin Consulting Group, who has advised both firms over the past two decades but wasn’t involved directly in the deal, commented, “This deal is groundbreaking and puts a big exclamation mark on whether or not non-CPA firm ownership can work in the accounting profession. Not only will this create the seventh largest CPA and advisory firm in the country, it will also increase the number of PE firms and related investment groups entering the accounting profession. The accounting profession has been around for 137 years, but it’s never had a day like today!”

The transaction is expected to close in the fourth quarter of 2024 subject to the approval of CBIZ’s stockholders, the approval of Marcum’s partners and other customary closing conditions. Perella Weinberg Partners is serving as CBIZ’s financial advisor and BakerHostetler is serving as CBIZ’s legal advisor for the transaction. Deutsche Bank is serving as Marcum’s financial advisor and Dechert LLP is serving as Marcum’s legal advisor for the transaction.

More information about the transaction can be found here. 

Both CBIZ and Marcum have participated in many M&A deals. CBIZ has done over 120 acquisitions since 2008. This year alone, in March, CBIZ acquired CompuData, a Philadelphia-based accounting solutions provider that specializes in software for small and midsize organizations. In February, the firm announced it acquired Erickson, Brown & Kloster LLC in Colorado Springs, Colorado, effective Feb. 1, 2024, while Mayer Hoffman McCann acquired the attest assets. In February of last year, CBIZ acquired the nonattest assets of Top 100 Firm Somerset CPAs and Advisors, an Indianapolis-based firm, while MHM acquired the attest assets.

In June, Marcum Technology, the tech arm of Top 25 firm Marcum, acquired the IT Enhanced Managed Services division of Top 10 firm CliftonLarsonAllen. In May, Marcum acquired Croskey Lanni PC, a firm based in the Detroit area with an office in Boca Raton, Florida, and Simon, Krowitz, Meadows & Bortnick, a firm based in Rockville, Maryland. In February, Marcum merged in Powers & Sullivan, a firm based in Wakefield, Massachusetts. In January, Marcum acquired Federman, Lally & Remis LLC, a firm in Farmington, Connecticut. Last year, Marcum added McCarthy & Co., a Regional Leader headquartered in Blue Bell, Pennsylvania, and Melanson, P.C., a Regional Leader firm in Merrimack, New Hampshire. In 2022, Marcum merged in E. Cohen and Co., CPAs, a Regional Leader firm in Rockville, Maryland, and completed a megamerger with another top firm, Friedman LLP, as well as a merger with RotenbergMeril CPAs, a firm in Saddle Brook, New Jersey.