Home Private Equity Cherry Bekaert receives private equity funding from Parthenon Capital

Cherry Bekaert receives private equity funding from Parthenon Capital


Cherry Bekaert, a Top 25 Firm based in Richmond, Virginia, became the latest accounting firm to receive private equity funding, with a strategic investment Thursday for an undisclosed sum from Parthenon Capital, a PE firm based in Boston.

A number of other private equity firms have been investing in accounting firms this past year. As in several similar deals, Cherry Bekaert is splitting its audit side from its consulting practice. Going forward, Cherry Bekaert LLP, a licensed CPA firm, will provide attest services, while Cherry Bekaert Advisory LLC will provide business advisory and non-attest services. EisnerAmper and Citrin Cooperman made similar moves after receiving PE funding (see story). In January, Parthenon acquired RSM US’s wealth management practice, but RSM US otherwise remained intact.

Michelle Thompson, the current managing partner of Cherry Bekaert LLP, will become CEO of Cherry Bekaert Advisory LLC, while Collin G. Hill, who has been managing partner of assurance services at Cherry Bekaert since 2018, will become managing partner of Cherry Bekaert LLP.

Cherry Bekaert

“We are excited about Parthenon’s commitment to provide additional investment in technology, infrastructure and other key areas that will enable us to better serve our clients,” Thompson said in a statement Thursday. “We know our clients will share in our enthusiasm as we reimagine the future of Cherry Bekaert and the new opportunities this restructuring presents for our people and the communities where we live and work.”

The investment is expected to accelerate Cherry Bekaert’s growth plans and expand the range of its client offerings.

“We share Michelle’s strategic vision for the future of the firm and we are excited to leverage our industry expertise and resources to accelerate investments that build upon Cherry Bekaert’s legacy of creating shared success for its people and clients,” said Parthenon Capital managing partner Andrew Dodson in a statement. “We are eager to collaborate with the Cherry Bekaert team to support continued strong growth, both organically and through strategic acquisitions, that allows the firm to achieve its full potential as one of the country’s leading professional services organizations.”

Guggenheim Securities LLC acted as sole financial advisor and Hunton Andrews Kurth LLP served as legal counsel to Cherry Bekaert. Its team includes Matthew Bosher, Kevin Georgerian, Rachel Northup, Rich Warren, Anup Myneni, Jordan Sisco, Scott Austin, Ryan Glasgow, Alex McGeoch, Kim MacLeod, Hillary Patterson, J.C. Chenault and David Baker. Kirkland & Ellis LLP and BakerHostetler LLP served as legal counsel to Parthenon. 

A spokesperson for the firm declined to disclose the amount of the funding or the financial terms of the agreement.

Private equity funding has helped fuel merger activity at several firms, including Citrin Cooperman and EisnerAmper, but it also provoked a warning earlier this month from the Securities and Exchange Commission’s acting chief accountant Paul Munter, who posted a lengthy statement on the SEC website about the “critical importance of the general standard of auditor independence and an ethical culture for the accounting profession.” Munter warned the SEC Office of Chief Accountant has noticed “numerous accounting firms have recently been engaging in increasingly complex business arrangements and, in some cases, attempting to facilitate these arrangements through restructurings and the use of alternative practice structures. Such arrangements have the potential to undermine auditor independence. We caution firms to carefully consider the implications for auditor independence when considering alternative practice structures, as will the OCA.”

Other accounting firms that have received funding from private equity, venture capital and other investment firms over the past year include Schellman & Co., RoseRyan, Warren Averett and CFGI.

Cherry Bekaert ranked No. 25 on Accounting Today’s 2022 list of the Top 100 Firms, with $252.1 million in annual revenue. In the past, Cherry Bekaert frequently did M&A deals, but its last publicly announced deal was in April 2020, when it acquired Tax Advantage Group, a consulting firm in Greenville, South Carolina. In February 2020, Cherry Bekaert acquired Icimo, a data analytics and services firm in the Raleigh, North Carolina area.

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