Chicago-based Baker Tilly (FY23 net revenue of $1.6 billion) today announced that it will receive a strategic investment from global private equity firms Hellman & Friedman (H&F) and Valeas Capital Partners (Valeas).
The investment, expected to close in early June 2024, recognizes Baker Tilly’s outstanding track record of value creation and marks the largest private equity investment in the U.S. CPA profession to date, the firm announced.
In the past five years, Baker Tilly, ranked by IPA as the 10th largest firm in the country, has doubled its workforce by expanding its footprint nationally and internationally. The significant investment (no terms were disclosed) from H&F and Valeas allows the firm to access additional capital and capabilities to accelerate growth through investments in talent, technology and further strategic acquisitions directed at providing best-in-class client services.
As part of this transaction, the firm will be restructured as two entities: Baker Tilly Advisory Group will provide the firm’s business advisory, tax and other services with Jeff Ferro continuing in his role as CEO. Baker Tilly US, a licensed CPA firm, will provide the firm’s attest services with Jere Shawver, MP of risk and assurance, stepping into the new role of CEO.
Baker Tilly US will operate as a separate legal entity pursuant to regulatory and independence requirements. Following the restructuring, both firms will remain partnerships, with all partners holding equity alongside H&F and Valeas in Baker Tilly Advisory Group.
“We are extremely proud to join forces with H&F and Valeas, blue-chip and growth-oriented private equity investors, who support our vision, recognize the value we’ve already created and see our vast future potential,” said Ferro. “With this transaction, the firm will be in an even stronger position to grow and invest in our business to create new opportunities for our talented team members and valued clients.”
Blake Kleinman, partner at H&F, said, “Our investment in Baker Tilly builds on H&F’s long history of successful partnerships in the professional services sector. Baker Tilly has built a remarkable firm with an empowering culture, tremendously talented workforce, and impressive track record of growth through outstanding client service and smart acquisitions.”
Ed Woiteshek, co-founder and MP of Valeas, added, “As a top global brand in accounting, tax and advisory with a strong track record of value creation and growth, Baker Tilly is uniquely positioned to lead the transformation of the industry. We look forward to working with Baker Tilly’s leaders to further the firm’s impressive growth trajectory in the years ahead.”
Allan Koltin, CEO of Koltin Consulting Group, who provided counsel to Baker Tilly and Hellman & Friedman throughout the process commented, “This investment is a huge step for Baker Tilly, and it will certainly put the firm in a strong position to lead the consolidation of the public accounting industry.”
Baker Tilly engaged William Blair & Company as its financial advisor and Foley & Lardner as its legal counsel on this transaction. Simpson Thacher & Bartlett and Vedder Price served as legal advisors to H&F and Ropes & Gray advised Valeas.