Accounting
CohnReznick makes plans after scoring private equity funding
CohnReznick is planning to expand after becoming the latest major firm to receive a private equity investment, through funds advised by Apax Partners.
The deal with Apax was
The amount of the investment was undisclosed. The funds advised by Apax, alongside with an independent co-investor, will collectively own a 51% stake in the non-attest business.
“We’ve had discussions in the private equity arena for a couple of years now, and we made the decision over this past summer that this was the right path for us, and we ventured down the process,” Kessler told Accounting Today. “Apax was very aligned with our management strategy, and we feel it’s going to have an impact on our growth in the future, and we’re looking forward to partnering with them.”
He believes the deal will add more capabilities for the firm to expand geographically in its existing areas as well as new territory. “We’re very heavy in the Northeast and the Mid-Atlantic, and we want to expand in the Southeast, Midwest and West Coast,” said Kessler. “We have a good presence right now in the Southeast, in the Midwest and on the West Coast, but we think this is an opportunity to expand our footprint and then also to really bring in advisory firms that we feel are compatible to the industries and clients that we serve, so we’re looking at this as an opportunity to really accelerate our growth.”
Both Apax and CohnReznick representatives will be on the board of the advisory entity, but only CohnReznick partners will be on the board of the attest business. “All of our partners will be partners in the advisory entity, along with Apax funds, and only our attest partners will be partners in the attest entity,” said Kessler.
The firm had been approached by a number of PE suitors in recent years. “We’ve probably spoken with a dozen to two dozen private equity funds over the past three years,” said Kessler. “We’ve been trying to educate ourselves on the benefits in the alternative practice structure and the model and what it would be for our staff and our clients and our partners. We spent a lot of time with a lot of different private equity funds looking into what a potential partnership could look like.”
While he and other partners liked many of the PE firms they spoke with, he said one of the things that stood out about Apax was its culture. “We really liked how they took the time to understand us and our history and how we got to this point in our vision and our strategy growing in the future, and we felt like we were aligned on the growth strategy,” said Kessler. “And we liked the fact that they did their homework on us. I think we gained a mutual respect for each other.”
O’Callghan agrees. “Partnering with Apax, they really did believe in our growth strategy, our culture, which we think is very special and important, as well as our talent and the people that we have now,” she said.
The firm has approximately 350 partners and 5,000 global employees, including 4,000 people in the U.S., and approximately 1,000 in India and the Philippines. CohnReznick has been able to double in size in the last five years, largely organically, while also doing some strategic acquisitions in key locations, Kessler noted. He would like to enhance the pace of acquisitions and the technology used by the firm internally and for clients. Partnering with a PE fund will help accelerate the firm’s ability to advance the tech projects that are already in the works over the finish line.
O’Callaghan predicts the deal will create greater opportunities for the firm’s people as well as create opportunities with a larger platform for their career advancement. She has been the service line leader for assurance of the firm’s largest region, the Northeast, and also the partner in charge of its relationship with the AICPA for years. She has worked at the firm for 25 years, and Kessler for 39 years.
“When I started, we had two offices, so we were able to grow from two offices to 29 and $1.1 billion in revenue, and we think this will be the next acceleration,” said Kessler.
The deal was valued at $2 billion, according to
CohnReznick plans to use the extra funds to expand its audit and tax practice as well as HIPAA advisory, client accounting services, performance improvement and transaction advisory services, and more.
“We’re looking to enhance all the existing areas that we’re in and always identifying new areas to grow into, but we’ll continue to evolve as we always have,” said Kessler. “But the advisory practices that we currently are involved with are seeing a lot of traction, and we plan to enhance those services.”
One area where CohnReznick has been seeing growth is public and private partnerships to help build infrastructure like airports, train stations and highways. In 2022, the firm helped
“We’ve done some work with the airports,” said Kessler. “We’ve done some work with Union Station in Washington, D.C. train and California highways, so we have a good project finance group. We do a lot of work with financial modeling, and infrastructure is one of the areas that they focus on, as well as all real estate credit incentives.”
Emergency management may be another area with the rise in natural disasters. “I think there’s a lot of opportunity across every single state, and one of the areas we focus on is emergency management and doing project management of large financial distributions that states are responsible for,” said Kessler,
Audit and attest service expansion will probably depend on the uncertain regulatory environment.
“Right now, I see us focused on our core assurance practice,” said O’Callaghan. “If there’s new opportunities that present themselves through the regulatory environment, then we would absolutely entertain those potential opportunities, but that’s really driven by regulators.”
The new Trump administration is likely to pursue fewer regulations on auditors and accountants, but the changes are hard to predict.
“I think we’re still vetting out what those changes are going to be,” said O’Callaghan. “It’s been almost two months now with the new administration, so we’ll have to see. Things are moving quickly, but we’ll have to see where everything falls out at the end.”
They’re both hopeful about the prospects for the firm and the overall accounting profession. “We think this is an exciting time for our profession,” said Kessler. “We’ve been in this business for a long time, and our partners have been in this business for a long time. It’s just an exciting time for our profession when you have institutional capital, and particularly private equity funds that are smart and are investing in the profession. They’re investing in the growth and the quality of the profession, and it’s just exciting to be a part of it. It really feels like we’re at a precipice to advance how we serve our clients, and it’s just an exciting time to be a CPA.”
Thirteen accounting firms have united to form
Operating in an alternative practice structure as Sorren CPAs PC for attest services and Sorren Inc. for business advisory and non-attest services, the combined firms have 85 partners and approximately $170 million in revenue, with plans to add more firms going forwards.
Many of the founding firms met as members of the BDO Alliance, and their leaders had gotten to know one another as attendees at alliance meetings and managing partner roundtables, according to Josh Tyree, the president of Sorren, who was previously president of Harris CPAs, an Idaho-based firm that was the first of the group to go the PE route, signing up with DFW in January 2024.
“Harris had started looking at that process with DFW for a good chunk of 2023,” Tyree recalled, “and I remember we were having a managing partner roundtable meeting in Nashville that year in the fall, and they were all there and I raised my hand after two hours of talking about PE and I said, ‘Hey guys, I think I’m going to jump in feet first and you guys should all come and join us.'”
And they did — with individual firms joining up with DFW over the course of 2024, and a large group in January 2025.
“There was a level of comfort,” he explained. “We knew all of our firms and our people and what we do and how we do it because we’d shared so much information over the years.”
Apart from Harris, the other firms currently comprising Sorren are:
- Acuity (Georgia);
- Aycock & Co. (Texas);
- Capital Nomics Valuations (California);
- Chigbrow Ryan Murata (Idaho);
- Hoerber Tillman & Co. (Florida);
- JRJBF (Illinois);
- KDP Advisors (Oregon);
- KMA Advisors (Wisconsin);
- Pisenti & Brinker (California);
- Roeser Accountancy (California).
- SBF Advisors (Florida);
- Stockman Kast Ryan & Co. (Colorado).
Allan Koltin, CEO of Koltin Consulting Group, said in a statement, “What makes Sorren stand out is the way these firms came together — with intention, shared values, and a commitment to staying deeply connected to their local markets. This group didn’t just merge for size; they united around a common purpose. It’s a blueprint for how innovative firms can grow, while staying true to who they are.”
The firms all have a strong focus on small and middle-market businesses and nonprofits that want a local firm feel and relationship, even if they need services across the country. As it adds new firms, Sorren will prioritizing those that are a fit with their current culture.
“If we go into another region, we want to start with leadership and good people; we’re not just randomly going out to try and find any firm that meets [a client need],” Tyree explained. “It really has to fit our culture and it has to have a leader in that area for us to go into that services.”
He also made the point that Sorren is still very much a work in progress — relying on current firm expertise to build national practices in tax, assurance, CAS and advisory.
“One goal when we originally started was we wanted to get to enough mass size that we could really start to build this by using leadership from and talent from all the firms that came on board,” Tyree said.
“It’s going to be super fun, but it’s a lot of work,” he added. “If all you’re looking to do is do a rollup or something like that, that’s probably not our style. We’re trying to create this for our type of client and our type of cultures. And we think there’s a little void there where we can do it.”
Donald Trump’s promise to strip Harvard University of its tax-exempt status prompted criticism Friday from a former Internal Revenue Service commissioner in the president’s first term, who said the process would take years and need a judge’s approval.
“The IRS will not allow itself to be weaponized,” former IRS Commissioner Charles Rettig said in an emailed statement to Bloomberg News. Rettig, who oversaw the agency from 2018 to 2022, was asked to respond to Trump’s social media post early Friday that said: “We are going to be taking away Harvard’s Tax Exempt Status. It’s what they deserve!”
Trump made the announcement after weeks of threatening a change to the school’s tax-exempt treatment, stepping up his attack on the Ivy League school.
Federal criminal law bars President Trump or the vice president from ordering the IRS to punish his political opponents or reward his allies. Rettig said the Treasury Department’s Inspector General for Tax Administration “closely monitors and investigates efforts to possibly influence IRS operations.”
The IRS cannot take any action on an organization’s tax-exempt status “without conducting an appropriate examination that would provide relevant information objectively supporting such an action,” Rettig said. “The IRS does not and should not conduct a ‘fishing expedition’ designed to hopefully uncover a relevant issue.”
Organizations also have administrative and judicial appeal rights that can take years to resolve before a federal judge approves a change in tax-exempt status, he said. “Throughout that process, there are many opportunities for resolution that would not result in the removal of the tax-exempt status of an organization,” he wrote.
Trump’s fight with Harvard escalated after it rejected his administration’s demands to reform campus policies to combat antisemitism and promote viewpoint diversity. The administration has frozen $2.2 billion in funding that supported projects including ALS and tuberculosis research.
On April 21, Harvard sued the U.S., claiming the funding freeze violated its free speech rights, and the government cannot dictate what it teaches, who it hires, and which students it admits.
In Trump’s second term, four people have held the IRS commissioner’s job on an acting basis.
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