What Blackstone’s $2B Deal Means for Citrin Cooperman

Move over, traditional accounting models—there’s a new sheriff in town. Blackstone, one of the world’s largest private equity firms, has acquired a majority stake in the US-based CPA firm Citrin Cooperman from New Mountain Capital in a deal valuing the accounting powerhouse at over $2 billion. This marks the first time a U.S. accounting firm has changed private equity hands, signaling a transformative moment for the industry.

The Numbers Don’t Lie

This deal happened at a 15x EBITDA (earnings before interest, taxes, depreciation, and amortization), up from the 11x valuation New Mountain Capital paid in 2021. That’s a 4x jump in just three years, cementing Citrin Cooperman’s place as a major player in the accounting and consulting sector.

The firm’s rapid growth played a big role in this valuation leap. Revenues soared from $351.8 million in 2021 to nearly $900 million in 2024, thanks to strategic acquisitions and an aggressive focus on advisory services. What started as a regional accounting firm in 1979 is now one of the top 20 in the U.S. With Blackstone’s 40%-45% stake and two-thirds ownership by its investor group, the firm is gearing up for a future fueled by advanced technology and expanded services.

Why Private Equity is Sweet on Accounting Firms

Private equity investments in accounting firms are reshaping the profession, driven by:

• Reliable Revenue Streams: Accounting firms are the steady workhorses of the business world. Clients need tax and audit services every year, creating a dependable revenue base that’s music to private equity’s ears.
• Economic Resilience: Come boom or bust, businesses still need accountants. This resilience makes the industry a safe haven for investors, especially during economic uncertainty.
• Room for Growth: The accounting sector is highly fragmented, making it ripe for consolidation. Private equity firms see opportunities to unite smaller firms into larger entities that can scale operations and compete with industry giants.
• Scalability and Efficiency: By injecting capital and operational expertise, PE firms can transform accounting businesses into leaner, more profitable operations.

A Firm on the Rise

Founded in 1979, Citrin Cooperman has grown into one of the top 20 accounting firms in the U.S. Under New Mountain Capital’s ownership, the firm’s revenue skyrocketed and thanks to strategic acquisitions and an expanded advisory portfolio. CEO Alan Badey is optimistic about the Blackstone partnership: “Blackstone will help us make additional investments in expanded service offerings and technology while continuing our commitment to delivering best-in-class culture and client experience.”

For Citrin Cooperman, this isn’t just about maintaining its success—it’s about accelerating it. Blackstone’s resources and expertise will enable the firm to push boundaries, adopt cutting-edge technology, and offer even more value to its clients. Partners at Citrin Cooperman are also cashing in. Many will retain ownership stakes, ensuring their continued involvement in the firm’s future, while also reaping rewards from the sales and performance-based bonuses.

Regulators Are Watching

Not everyone is raising a toast, though. Regulators have raised eyebrows about private equity’s growing footprint in the accounting world. CPA licensing laws mandate that audit firms remain primarily owned by certified public accountants—anywhere from 50% to full ownership depending on the state. To comply, many firms, including Citrin Cooperman, use administrative services agreements that separate audit and non-audit units. But questions remain about potential conflicts of interest. Private equity’s profit-driven motives may not always align with the impartiality required in audits.

A Roadmap for the Future

With Blackstone in its corner, Citrin Cooperman is poised for a new era of growth. The firm plans to invest heavily in technology and expand its service offerings, solidifying its position as a leader in the accounting and consulting space. For Blackstone, this isn’t just an investment; it’s a strategic move to capitalize on the scalability and resilience of the accounting industry. And for the accounting world at large, Citrin Cooperman’s success is proof that embracing change can unlock unparalleled opportunities. As they say in business, it’s time to “put your money where your mouth is.” Clearly, Blackstone is fully embracing this approach. Stay informed and inspired—subscribe to MYCPE ONE Insights for expert insights and actionable tips delivered right to your inbox!