In early 2024, Baker Tilly, a leading U.S.-based advisory CPA firm, announced a significant strategic investment led by private equity firms Hellman & Friedman (H&F) and Valeas Capital Partners. This investment, estimated to close in early June 2024, marks the largest private equity transaction in the U.S. Certified Public Accountant (CPA) sector to date. The deal recognizes Baker Tilly’s outstanding track record of value creation and positions the firm for accelerated growth, providing access to additional capital and capabilities to invest in talent, technology, and strategic acquisitions aimed at enhancing client services.
Background of Baker Tilly
Baker Tilly is a prominent advisory CPA firm offering audit, tax, and advisory services primarily to middle-market clients. Headquartered in Chicago, Illinois, the firm has experienced significant growth over the past five years, doubling its workforce and expanding its national and international footprint. This expansion has solidified Baker Tilly’s position as a top 10 advisory CPA firm in the United States. The firm’s commitment to delivering exceptional client service and its strategic acquisitions have contributed to its impressive growth trajectory.
Details of the Strategic Investment
The strategic investment involves a restructuring of Baker Tilly into two separate entities
- Baker Tilly Advisory Group, LPThis entity will provide the firm’s business advisory, tax, and other services. Jeff Ferro will continue in his role as CEO of this group.
- Baker Tilly US, LLPA licensed CPA firm that will provide the firm’s attest services. Jere Shawver, Managing Partner – Risk and Assurance, will assume the role of CEO of this entity.
Both entities will operate as separate legal entities to comply with regulatory and independence requirements. The investment from H&F and Valeas will enable Baker Tilly to accelerate its growth through strategic initiatives, including investments in talent acquisition, technological advancements, and further acquisitions aimed at expanding its service offerings and geographic reach.
Role of Hellman & Friedman
Hellman & Friedman is a San Francisco-based private equity firm founded in 1984. The firm specializes in leveraged buyouts and growth capital investments, focusing on industries such as media, financial services, professional services, and information services. H&F’s investment in Baker Tilly builds on its long history of successful partnerships in the professional services sector. Blake Kleinman, Partner at H&F, expressed excitement about investing alongside Baker Tilly’s partners and senior leadership to bolster its capabilities, expand its footprint, and help build the country’s preeminent mid-market advisory CPA firm.
Strategic Implications of the Investment
The strategic investment by H&F and Valeas Capital Partners is expected to have several significant implications for Baker Tilly
- Enhanced Growth OpportunitiesThe additional capital will enable Baker Tilly to pursue strategic acquisitions and investments in technology and talent, accelerating its growth and service capabilities.
- Expansion of Service OfferingsThe restructuring into two separate entities allows for a more focused approach to delivering audit, tax, and advisory services, enhancing client satisfaction and operational efficiency.
- Strengthened Market PositionThe investment positions Baker Tilly to better compete with other top advisory CPA firms, leveraging its expanded resources and capabilities to attract new clients and retain existing ones.
- Long-Term Value CreationThe partnership with H&F and Valeas aligns with Baker Tilly’s long-term strategic goals, fostering sustainable growth and value creation for stakeholders.
Future Outlook
Looking ahead, the strategic investment is expected to drive Baker Tilly’s continued success in the advisory CPA sector. The firm’s leadership is committed to leveraging the additional resources and capabilities to enhance client services, expand its market presence, and achieve its long-term growth objectives. As the firm continues to evolve and adapt to the changing business landscape, the partnership with H&F and Valeas provides a solid foundation for future success.