DEFA14A: CBIZ to Acquire Marcum, Solidifying Position as a Leading Professional Services Provider

CBIZ has announced a definitive agreement to acquire Marcum, a move that will establish CBIZ as the seventh-largest accounting services provider in the U.S. with approximately $2.8 billion in revenue.

Summary

• CBIZ has announced its plan to acquire Marcum, a major transaction in the company's history.
• The acquisition is expected to close in the fourth quarter of 2024, pending stockholder and partner approvals, and other customary conditions.
• The combined company will have approximately $2.8 billion in revenue and will be the seventh-largest accounting services provider in the U.S.
• CBIZ anticipates the acquisition to be accretive in 2025, contributing an estimated 10% to Adjusted EPS.
• Marcum is the 13th largest accounting and advisory firm in the U.S. with $1.2 billion in revenue, serving over 35,000 clients across 43 offices.
• The acquisition aims to enhance CBIZ's market position, accelerate growth, attract and retain talent, improve client experience, expand industry expertise, and drive innovation and technology investments.

Sentiment

Score: 8

Explanation: The document expresses a highly positive sentiment regarding the acquisition, emphasizing growth opportunities, enhanced market position, and benefits for stakeholders. The management's comments and the overall tone suggest confidence in the success of the transaction.

Positives

• The acquisition will solidify CBIZ's position as a leading provider of professional services to the middle market.
• It is expected to accelerate growth and position CBIZ as an acquirer of choice.
• The combined company will be able to attract and retain top talent.
• Clients will benefit from an unmatched breadth of services and depth of expertise.
• The acquisition will enable greater investment in technology and data-driven solutions.
• Shareholder value is expected to increase, with the deal being accretive in 2025.

Risks

• The transaction is subject to stockholder and partner approvals, as well as customary closing conditions.
• There is a risk of litigation related to the transaction.
• Anticipated benefits and synergies may not be achieved in a timely manner or at all.
• The costs of the transaction and/or assumed liabilities could be higher than anticipated.
• Integration may prove more costly and/or time-consuming than expected.
• The transaction could disrupt ongoing plans and operations.
• Financing may not be obtained as anticipated.
• Increased leverage of the company following the transaction.

Future Outlook

CBIZ expects the acquisition to solidify its position as a leading provider of professional services and to drive accelerated growth. The company anticipates the deal to be accretive in 2025.

Management Comments

• Jerry Grisko stated that the acquisition of Marcum marks the biggest such transaction in CBIZ's history.
• Grisko mentioned that the combined company will become the seventh-largest accounting services provider in the country.
• Grisko emphasized the opportunity for growth for team members, clients, and the business overall.

Industry Context

This acquisition reflects a trend of consolidation in the accounting and professional services industry, driven by the need for scale, access to talent, and investment in technology. CBIZ's move to acquire Marcum positions it to better compete with larger firms and to capitalize on the growing demand for professional services in the middle market.

Comparison to Industry Standards

• With the acquisition of Marcum, CBIZ aims to become the seventh-largest accounting services provider in the U.S., indicating a move to compete more directly with firms like Deloitte, EY, PwC, and KPMG.
• The combined revenue of approximately $2.8 billion would place CBIZ in a stronger position relative to other large regional and national accounting firms such as RSM, BDO, and Grant Thornton.
• Marcum's focus on industry expertise aligns with a broader trend in the professional services industry towards specialization and providing tailored solutions to clients in specific sectors.

Stakeholder Impact

• Shareholders are expected to benefit from increased shareholder value and growth.
• Team members will have new growth opportunities and access to more interesting work.
• Clients will benefit from an expanded breadth of services and depth of expertise.
• The acquisition is expected to strengthen CBIZ's presence in key industries and markets.

Next Steps

• The company will file a proxy statement with the SEC.
• The definitive proxy statement will be mailed to the company's stockholders.
• Stockholder and partner approvals are required to close the deal.
• The deal is expected to close in the fourth quarter of 2024.

Key Dates

Keywords

acquisition, CBIZ, Marcum, accounting services, professional services, middle market, merger