DEFA14A: CBIZ Refiles Proxy Statement Amid SEC EDGAR System Issues, Seeks Shareholder Approval for Marcum Merger

CBIZ refiled its definitive proxy statement to ensure public access to information regarding the proposed merger with Marcum due to ongoing technical issues with the SEC's EDGAR system.

Summary

• CBIZ, Inc. refiled a definitive proxy statement on September 17, 2024, concerning the proposed merger with Marcum LLP due to technical issues with the SEC's EDGAR system that prevented public viewing of the original filing.
• A special meeting of CBIZ shareholders is scheduled for October 23, 2024, to vote on the issuance of stock consideration related to the merger and a proposal to adjourn the meeting if necessary.
• The merger agreement, dated July 30, 2024, involves CBIZ's subsidiary, PMMS LLC, merging with Marcum Advisory Group LLC (MAG), with MAG becoming a wholly-owned subsidiary of CBIZ.
• Prior to the merger, Marcum will contribute its non-attest business assets to MAG, and CBIZ CPAs P.C. will purchase Marcum's attest business assets in a separate transaction.
• The aggregate consideration for the transaction is approximately $2.3 billion, including approximately $1.1 billion in cash and approximately 14.4 million shares of CBIZ common stock.
• The stock consideration will be delivered in installments, with 5% subject to continued service requirements and the remainder delivered over approximately 36 months.
• Shareholder approval is required to comply with NYSE listing rules due to the issuance of shares representing approximately 22% of CBIZ's outstanding common stock.
• The CBIZ Board of Directors recommends voting FOR the stock issuance proposal and the adjournment proposal.

Sentiment

Score: 6

Explanation: The document is primarily factual and procedural, outlining the details of the merger and the required shareholder vote. While the board recommends voting in favor, the document also acknowledges various risks and uncertainties associated with the transaction, resulting in a neutral to slightly positive sentiment.

Positives

• The merger is expected to enable CBIZ to achieve scale and solidify its position as a leading provider of professional advisory services.
• The transaction is expected to create significant financial benefits for CBIZ and its shareholders.
• The significant portion of the purchase price payable in stock consideration aligns the long-term interests of Marcum's owners with CBIZ and its shareholders.
• The continuity in the CBIZ board and executive officers, with the addition of a Marcum-nominated director, is expected to further the strategic benefits of the transaction.

Risks

• The completion of the transaction is subject to various closing conditions, including shareholder approval, regulatory approvals, and obtaining debt financing.
• Failure to complete the transaction could negatively impact CBIZ's stock price and future business and financial results.
• The integration of Marcum's operations may be challenging and could result in the combined business failing to meet expectations.
• The loss of key personnel could have a material adverse effect on CBIZ's financial condition, results of operations, and growth prospects.
• Increased leverage following the transaction may adversely impact CBIZ's business.
• The significant number of shares issuable as stock consideration may adversely impact CBIZ's stock price.
• CBIZ's current shareholders will have a reduced ownership and voting interest after the transaction.
• CBIZ may be subject to litigation or threats of litigation challenging the transaction.
• Restrictions imposed by independence requirements and conflict of interest rules may limit CBIZ's ability to provide services to clients of the attest firms with which it has contractual relationships.
• Recent SEC and PCAOB sanctions against Marcum may adversely impact CBIZ's performance and reputation.
• If CBIZ is unable to implement and maintain effective internal control over financial reporting following completion of the transaction, investors may lose confidence in the accuracy and completeness of its financial reports and the market price of its common stock may decline.
• Cyber-attacks or other security breaches involving CBIZ's or Marcum's computer systems could materially and adversely affect CBIZ's business.
• Rapid technological changes could significantly impact CBIZ's competitive position, client relationships and operating results and its ability to realize the anticipated benefits of the transaction.
• CBIZ's goodwill and other intangible assets could become impaired, which could lead to material non-cash charges against earnings and a material impact on its results of operations and financial condition.
• The transaction could exacerbate the other existing business risk that CBIZ faces.

Future Outlook

Subject to shareholder approval and other conditions, the transaction is expected to close in the fourth quarter of 2024.

Management Comments

• On behalf of the Board, I would like to thank you for your support of the Company and look forward to a successful completion of the Transaction.
• The Board recommends that you vote FOR each of these proposals.

Industry Context

The transaction is expected to enable CBIZ to achieve scale and accelerate its position in the marketplace, solidifying its position as a leading provider of professional advisory services to the growing middle market and the seventh-largest accounting services provider in the U.S.

Stakeholder Impact

• Shareholders are asked to vote on the proposed merger, which could impact the value of their investment.
• Employees of both CBIZ and Marcum may be affected by the integration of the two companies.
• Clients of both CBIZ and Marcum could benefit from the expanded services and expertise of the combined company.

Next Steps

• CBIZ shareholders will vote on the stock issuance proposal and the adjournment proposal at the special meeting on October 23, 2024.
• The transaction is expected to close in the fourth quarter of 2024, subject to shareholder approval and other closing conditions.

Key Dates

Keywords

merger, CBIZ, Marcum, stock issuance, shareholder approval, proxy statement, acquisition, financial services, NYSE, EDGAR, consideration, integration, risks, debt financing, attest business