Accounting
Carr, Riggs & Ingram and PKF O’Connor Davies receive outside investment
Two Top 50 Firms, Carr, Riggs & Ingram and PKF O’Connor Davies, separately announced Monday they scored funding from investment firms, marking the latest examples of accounting firms attracting outside financing from venture capital and other sources.
CRI, based in Enterprise, Alabama, received funding from Centerbridge Partners, a private investment management firm, and Bessemer Venture Partners, a VC firm. PKFOD, based in New York, received funding from Investcorp, a global alternative investment firm, and the Public Sector Pension Investment Board, one of Canada’s largest pension investment managers. (Investcorp formerly owned Accounting Today’s parent company.)
The amount of investment was not disclosed in either case. In both cases, the firms will be splitting their attest and non-attest sides in an alternative practice structure, as is common practice when private equity firms invest in CPA firms.
Carr, Riggs & Ingram, L.L.C., as an independent licensed CPA firm, will provide assurance, attest and audit services. CRI Advisors, LLC (including its subsidiary entities) will operate as a separate legal entity, providing clients with tax and business consulting services.
PKF O’Connor Davies LLP, as a licensed CPA firm, will provide attest services, while PKF O’Connor Davies Advisory LLC and its subsidiary entities will continue to provide tax and advisory services.
CRI ranked No, 24 on Accounting Today’s 2024 list of the Top 100 Firms, with $455.36 million in annual revenue. PKFOD ranked No. 26 with $380 million.
CRI plans to use the extra funding for M&A, technology-driven service delivery, and client-centered innovation.
“Centerbridge and Bessemer recognize the value that CRI has already built and see the potential for where the company can go,” said CRI chairman Bill Carr in a statement Monday. “We are thrilled to gain partners whose vision aligns with ours. We believe this strategic investment will greatly benefit our talented team members and certainly our valued clients as well. We’ll be able to invest more into our staff, create new opportunities, and continue doing what we’ve always done, which is delivering exceptional results to our clients.”
Centerbridge has approximately $40 billion in assets under management as of Sept. 30, 2024, while Bessemer has more than $18 billion in assets under management. Centerbridge and Bessemer are taking a combined 51% voting interest in the firm.
“This combination is truly groundbreaking—CRI is the accounting profession’s ‘feel good’ story of the century,” stated Koltin Consulting Group CEO Allan Koltin, who consulted with CRI during the investment research and transaction process. “CRI is the only top 25 firm in the country to grow from a start-up to $500 million in a little over 25 years, making it the country’s fastest-growing first-generation firm. From its humble beginnings in Enterprise, Alabama, and Destin, Florida, CRI has become the youngest top 100 firm ever to receive a private equity investment as a foundation firm. Many private equity firms courted them during this process, but they chose Centerbridge and Bessemer for their similar values and shared vision of what CRI can become at the national level. There is no question in my mind that CRI will grow substantially over the next years while maintaining the ‘family feel’ culture they have had since day one.”
CRI engaged William Blair & Company, L.L.C. as its financial advisor and McGuireWoods LLP as its legal counsel for this transaction. Simpson Thacher & Bartlett LLP and Vedder Price served as legal advisors, and Citizens M&A Advisory served as financial advisor to Centerbridge and Bessemer.
Courtesy of PKF O’Connor Davies
PKFOD plans to use the outside investment to improve its competitiveness and long-term sustainability, strengthening its balance sheet to provide flexibility for increased M&A activity as well as invest in new technology and service lines. PKFOD did not disclose whether Investcorp and PSP will be taking a majority interest in the firm.
“Since inception, our identity as an organization has been our enduring commitment to service. This investment from Investcorp and PSP further validates that we have an attractive business with a great brand, great talent and great customers,” said Kevin Keane, PKF O’Connor Davies’ Executive Chairman. “Investcorp and PSP Investments have a long history of backing profitable, industry-leading companies with demonstratable growth avenues and were impressed by PKFOD and the culture that we have built.”
Capstone Partners served as sole financial advisor while Levenfeld Pearlstein served as legal advisor to PKF O’Connor Davies. Gibson Dunn served as legal advisor to Investcorp. Weil, Gotshal & Manges served as legal advisor while McDermott Will & Emery served as regulatory counsel to PSP Investments.
“In recent years, Investcorp has established itself as a partner of choice for ambitious professional services organizations seeking to grow,” said Steve Miller, co-head of North America Private Equity at Investcorp, in a statement. “Together with PSP Investments, with whom we have a strong investment track record in the professional services sector, and more than 200 PKFOD partners, we are excited to build upon the organization’s decades of success.”
Carr, Riggs & Ingram, a Top 25 Firm based in Enterprise, Alabama, has added CapinCrouse, a Regional Leader based in Indianapolis, effective Jan. 17, 2025.
The deal is CRI’s biggest merger in its history, and the first since it
CapinCrouse focuses on exclusively serving nonprofits, such as faith-based organizations and private colleges. The merger will add 40 partners, 185 professionals and 15 offices to CRI, which has 437 partners and 2,304 staff
After the outside investment, CRI split its attest and non-attest practices, as is common when accounting firms receive private equity or venture capital funding. Carr, Riggs & Ingram, L.L.C., as an independent licensed CPA firm, is providing assurance, attest and audit services. CRI Advisors, LLC (including its subsidiary entities) operates as a separate legal entity, providing clients with tax and business consulting services.
“This merger represents an exciting milestone in our firm’s history and a significant advancement for both CRI and CapinCrouse,” said CRI Advisors LLC chairman Bill Carr in a statement Tuesday. “We have previously invested in firms that specialize in serving faith-based organizations and private colleges. With the addition of CapinCrouse, CRI is now positioned to become the leading national provider in these vital markets. By combining our strengths, we will enhance the value we offer and greatly expand our national geographical presence. We are proud to welcome CapinCrouse to the CRI family.”
Financial terms of the deal were not disclosed. CRI ranked No. 24 on Accounting Today‘s 2024 list of the Top 100 Firms, with $455.36 million in annual revenue. CapinCrouse ranked No. 27 on Accounting Today‘s Regional Leaders list of the Top Firms in the Great Lakes region, with $35.51 million in annual revenue.
“We are very pleased to join CRI,” said Fran Brown, Managing Partner of CapinCrouse. “For over 50 years, our focus has been on providing innovative service to nonprofit organizations whose outcomes are measured in lives changed. CRI’s commitment to client service, respect, and integrity is an excellent fit with our mission and firm culture. We will continue to operate under the CapinCrouse brand and are excited to now have access to more offerings and resources to further drive exceptional client service.”
Koltin Consulting Group CEO Allan Koltin advised both firms on the merger. “It is interesting to note that this is CRI’s biggest M&A deal in its history, and it comes on the heels of their private equity deal with Centerbridge Partners and Bessemer Venture Partners,” he said in a statement. “CapinCrouse, a top 125 firm nationally, is viewed by many as the preeminent firm in the country when it comes to the audit and related advisory services of nonprofits and religious organizations. My intuition suggests that going forward, we will see CRI expanding its geographic reach nationally by combining with more top 200 firms.”
Last August, CRI added
In 2022, CapinCrouse acquired the
President Donald Trump named Mark Uyeda, a Republican member of the Securities and Exchange Commission, as acting chairman of the SEC, while confirmation hearings await for Trump’s official pick as chairman, Paul Atkins.
Uyeda has been an SEC commissioner since 2022 and a member of the staff since 2006. Last month, he
“I am honored to serve in this capacity after serving as a Commissioner since 2022, and a member of the staff since 2006,” Uyeda said in a statement Monday. “I have great respect for the knowledge, expertise and experience of the agency and its people. The SEC has a vital mission—protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation—that plays a key role in promoting innovation, jobs creation, and the American Dream.”
Last month, Trump
As acting chairman, Uyeda announced Monday that he would be launching a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets. The task force will be led by another Republican commissioner, Hester Peirce.
The task force plans to collaborate with SEC staff and the public to set the SEC on a regulatory path as opposed to pursuing enforcement actions to regulate crypto “retroactively and reactively,” according to a
“This undertaking will take time, patience and much hard work,” Peirce said in a statement. “It will succeed only if the Task Force has input from a wide range of investors, industry participants, academics and other interested parties. We look forward to working hand-in-hand with the public to foster a regulatory environment that protects investors, facilitates capital formation, fosters market integrity, and supports innovation.”
The task force plans to hold roundtables in the future, but in the meantime is asking for public input at [email protected].
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