All or most of Marcum’s audit partners will remain partners, while its non-audit partners will become managing directors at CBIZ, the Wall Street Journal reported today. The Marcum brand will be retired after the transaction is finalized, which is expected in the fourth quarter of this year. But the deal first has to be approved by CBIZ stockholders, Marcum’s partners, and regulators, and is subject to other customary closing conditions.

The cash-and-stock transaction is valued at approximately $2.3 billion. It’s expected that approximately half of the transaction consideration will be paid in cash and the remainder shares of CBIZ common stock. Consideration for the transaction would include $1.1 billion in cash and 14.4 million shares of CBIZ common stock, based on a per-share price of $76.84, the WSJ reported.

Once the deal closes, the combined firm will have approximately $2.8 billion in revenue, which will likely vault CBIZ—currently the 11th largest accounting firm in the U.S. by revenue—over Grant Thornton for the seventh spot in the top 10, just behind BDO USA. Grant Thornton had revenue of $2.4 billion during its 2023 fiscal year. It has yet to announce its financial results for FY 2024.

CBIZ pulled in $1.35 billion of revenue during its most recent fiscal year, while Marcum, the nation’s 13th largest firm, had revenue of $1.325 billion during its most recent fiscal year, according to INSIDE Public Accounting.

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

Employee reaction

In a post on professional business and career community platform Fishbowl about the acquisition, a CBIZ employee said they were “honestly shocked” and “I don’t know how to feel about it yet.”

“I learned about this for the first time at 7:15 this morning when reading the press release,” the CBIZ employee wrote. “[I]t’s the largest acquisition in CBIZ history, the integration is what concerns me the most. There will be A LOT of changes.”

Another CBIZ employee wrote, “I don’t think anyone outside of Senior Leadership knew. Even some Directors didn’t know until today. Having been through similar acquisitions, I don’t think that is uncommon due to regulatory requirements (with CBIZ being a public co.).”

A Marcum employee responded, “Nobody knew—partners only found out yesterday after the markets closed. Serious confidentiality agreements were involved.”

But somebody did know this was going down at least a week ago, based on this tip Going Concern received and posted on X July 24:

In another post about the deal on Reddit, a CBIZ employee said the acquisition makes them “very uneasy” and said “I don’t want it to affect me at my local office.”

Another CBIZ employee responded, mentioning the firm’s 2022 acquisition of then-top 50 firm Marks Paneth: “I doubt it will. My guess (and it’s just that) is that they’ll handle Marcum like they’ve done with Marks Paneth—run it as a semi-autonomous division within CBIZ for a few years and not really change what goes on in the local offices of either company.”

“The future has never been more exciting”

Founded in 1951, Marcum has 43 offices in major markets across the U.S. and serves more than 35,000 clients. The firm employs more than 3,500 professionals. 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. 

In a letter to clients that was obtained by CPA Practice Advisor, Marcum Chairman and CEO Jeffrey Weiner wrote:

Hello Clients & Friends,

I am incredibly excited to announce we have signed a definitive agreement for CBIZ, Inc. (“CBIZ”), the country’s 11th-largest business advisory and CPA firm, to acquire Marcum LLP (“Marcum”). Pending various approvals, we anticipate the transaction will close this fall.

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.

This is an exciting step for Marcum as we look toward what’s next for our business and provide you, our clients, with access to a host of new resources to service your business and personal needs. Upon close, our combined team of 10,000 professionals will offer much more to help you achieve your goals. 

CBIZ and Marcum share a dedication to high-quality, innovative, professional services, investor protection, and personalized local client relationships. By joining forces, we’ll capitalize on our strengths, sharpen our insights in a variety of industries, and leverage our similar models to serve you better. We will continue to work alongside you as your trusted advisors for your most important strategic decisions. 

When it comes to innovation, our shared commitment to leveraging our proprietary data and deploying the latest technology will enable the development and expansion of new solutions—business intelligence, workflow reengineering, and machine learning—ensuring we meet your evolving needs and offer actionable solutions that are miles ahead of the competition.

Our partners look forward to talking with you in more detail about the opportunities this combination presents. Have no doubt, you will continue to receive the premier level of service you have come to expect from Marcum.

As a CBIZ client, very little will change. You will continue to work with the same professionals and partners you have come to know and trust. Our phone numbers and email addresses will remain unchanged, and we will operate out of our current offices.

Please reach out if you have any questions about this process.

We will communicate early and often about any changes to our processes to provide a seamless transition.

The future has never been more exciting because of the growth opportunities it will unleash for our people and the solutions it will provide our clients. I thank you for your business and your continued trust in our Firm.

Best Regards, 

Jeffrey M. Weiner
Chairman & CEO
Marcum LLP

In a public statement about the acquisition, Weiner, who has been Marcum’s chairman and CEO since 2017, 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.”

Allan Koltin, CEO of Koltin Consulting Group, who has advised both firms over the past two decades but wasn’t involved directly in today’s 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!”

CBIZ has no plans to seek a private equity investment following the acquisition, the WSJ reported.