PKF O’Connor Davies is getting an infusion of capital from Bahrain-based private equity group Investcorp and the Public Sector Pension Investment Board (PSP Investments), one of Canada’s largest pension investment managers, the Harrison, NY-based top 30 accounting firm said on Nov. 18.
Financial terms of the deal weren’t disclosed. PKF O’Connor Davies said in a media release that the transaction has received regulatory approval and is subject to other standard closing conditions.
The accounting firm said the deal with Investcorp and PSP Investments “represents a significant milestone” that will help “fuel growth and expand service offerings to enhance the overall client experience.”
Much like other accounting firms that have sold a stake in their business to a public equity group, PKF O’Connor Davies said the injection of funding will “elevate its competitiveness and amplify long-term sustainability” and “provide flexibility for increased M&A activity, as well as investing in cutting-edge technology and new service lines.”
Founded in 1982, Investcorp manages $52 billion in assets, including assets managed by third-party managers. Its investment portfolio includes global consulting firm AlixPartners, as well as Resultant, United Talent Agency, and CrossCountry Consulting.
Established in 1999, PSP Investments manages $264.9 billion of net assets as of March 31, 2024, including a diversified global portfolio composed of investments in capital markets, private equity, real estate, infrastructure, natural resources, and credit investments.
“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,” Kevin Keane, PKF O’Connor Davies’ executive chairman, said in a statement. “Investcorp and PSP Investments have a long history of backing profitable, industry-leading companies with demonstratable growth avenues and were impressed by PKF O’Connor Davies and the culture that we have built.”
As ownership rules in the accounting sector have evolved, Investcorp has been seeking the right firm to back, said principal Vitali Bourchtein.
“We were instantly impressed by PKF O’Connor Davies’ leadership team and the exceptional track record of financial performance,” he said. “Providing the organization with additional resources will help accelerate growth and enhance its competitive position in the accounting, tax, and advisory verticals.”
Steve Miller, co-head of North America private equity at Investcorp, added, “In recent years, Investcorp has established itself as a partner of choice for ambitious professional services organizations seeking to grow. Together with PSP Investments, with whom we have a history of investments in the professional services sector, and more than 200 PKF O’Connor Davies partners, we are excited to build upon the organization’s decades of success.”
David Morin, managing director and head of North America private equity at PSP Investments, said PSP “is excited to partner with Investcorp and PKF O’Connor Davies to provide strategic capital and work together in realizing PKF O’Connor Davies’ full potential during their next chapter of growth.”
PKF O’Connor Davies will continue to operate in an alternative practice structure in accordance with applicable professional standards. PKF O’Connor Davies LLP, a licensed CPA firm, will provide attest services, while PKF O’Connor Davies Advisory LLC and its subsidiary entities will provide tax and advisory services.
The accounting firm brought in $377.5 million in revenue during its most recent fiscal year, according to INSIDE Public Accounting.
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.
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Tags: Accounting, Firm Management
