Overlapping ownership tests conflict and control. Cue the lawyers.
Rivals in the Loop: Grant Thornton and Wipfli, now stablemates under New Mountain Capital’s billion-dollar investments, seek to maintain separate operations and arm’s-length decision-making. Shown in Chicago: The Grant Thornton Tower on North Clark (left) and Wipfli offices at the Chicago Title building on Wacker (right).
By CPA Trendlines Research
Grant Thornton and Wipfli keep offices barely a half-mile apart in Chicago’s Loop — about a 10-minute walk, or a single stop on the “L.”
Zoom out. After a generation of competitive drive, the rival firms are now part of the same investor’s stable.
MORE Private Equity | What $1 Billion Buys in Today’s CPA Market
Private equity’s push into accounting is making for some strange bedfellows, as some investment firms build out networks of ostensibly independent firms that increasingly overlap in clients, services, acquisitions and talent markets.
With more than 500 deals under study, the CPA PE Deal Tracker™ from CPA Trendlines Research provides a vivid picture of private equity firms quietly adding a new layer of consolidation as they roll up the CPA profession. Sponsors are evolving into holding companies with multiple platforms, built simultaneously on a number of large CPA firms as acquisition engines. At least five sponsors now hold two or more competing platforms at the same time.
“As the Peter Parker principle reminds us, with great power comes great responsibility,” Proskauer Rose LLP, the private-funds legal powerhouse, says in a client playbook. “Sponsors should remember the portfolio company corollary: with greater control comes greater exposure to liability.”
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