Top 25 Company Cherry Bekaert Reveals Transformative Private Equity Investment

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Private equity claimed another stake in one of the top 25 accounting firms.

Cherry Bekaert LLP announced Thursday that private equity firm Parthenon Capital has made a strategic investment in the Raleigh, North Carolina-based accounting firm.

The deal, the financial terms of which were not disclosed, splits Cherry Bekaert into two parts. Because only CPAs can own businesses that provide attestation services, Cherry Bekaert LLP was spun off into a separate legal entity. Meanwhile, Parthenon is injecting capital into new company Cherry Bekaert Advisory LLC, which will use the cash to fund the growth of its business advisory and non-attestation services.

Michelle Thompson, the current Managing Partner of Cherry Bekaert LLP, will serve as Managing Director of Cherry Bekaert Advisory LLC, while Collin G. Hill will become the Managing Partner of Cherry Bekaert LLP.

“We are delighted with Parthenon’s commitment to provide additional investments in technology, infrastructure and other key areas that will allow us to better serve our customers,” Thompson said in a press release.

Thursday’s announcement is the third private equity investment in one of the top 25 companies announced last year. In August 2021, it was announced that TowerBrook Capital Partners had purchased an undisclosed stake in EisnerAmper LLP, the first such deal between one of the top 20 accounting firms and a private equity firm.

In April, private equity firm New Mountain Capital announced that it had acquired a majority stake in the top 25 Citrin Cooperman companies in a deal struck six months earlier.

As with the Cherry Bekaert deal, investments by EisnerAmper and Citrin Cooperman also resulted in each company being spun off into separate attesting and non-attesting entities.

Parthenon managing partner Andrew Dodson said his capital injection into Cherry Bekaert would be used to promote organic growth and fund acquisitions.

“We look forward to working with the team at Cherry Bekaert to support continued strong growth,” Dodson said in the press release.

Guggenheim Securities LLC acted as sole financial advisor for the transaction. Hunton Andrews Kurth LLP acted as legal counsel to Cherry Bekaert. Kirkland & Ellis LLP and BakerHostetler LLP served as Parthenon’s legal advisors.

— To comment on this article or suggest an idea for another article, contact Kevin Brewer at [email protected].

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