Marcum Acquisition: Key Details, Impact, and What Comes Next

CBIZ's acquisition of Marcum marks a significant milestone in the professional services industry. This strategic move, valued at approximately $2.3 billion, positions CBIZ as a leading full-service advisor in the U.S. With combined annualized revenue expected to reach $2.8 billion, the merger enhances CBIZ's market presence, service offerings, and technological capabilities, benefiting clients and shareholders alike.

What Is Marcum?

Founded in 1951, Marcum LLP is a national accounting and advisory services firm. It offers a comprehensive range of services including tax advisory, assurance, and specialized advisory services such as valuation and forensic services. Marcum differentiates itself with industry-focused insights, a full spectrum of traditional and specialized services, and a client-centric approach aimed at entrepreneurial, middle-market companies and high net worth individuals. The firm emphasizes long-term relationships and trusted advisory services.

Who Acquired Marcum?

CBIZ is a prominent professional services firm in the U.S., offering a wide array of services including accounting, tax, advisory, benefits, insurance, and technology solutions. The company provides forward-thinking insights and actionable solutions to help clients anticipate next steps and accelerate growth. CBIZ's extensive service offerings and industry-specific solutions underscore its influence and capability to support diverse business needs, positioning it as a leading advisor in the professional services industry.

When Was Marcum Acquired?

CBIZ completed its acquisition of Marcum on November 1, 2024. This strategic move comes at a time when the professional services industry is witnessing significant consolidation and increased private equity interest. The timing aligns with CBIZ's growth strategy, aiming to enhance its market position and service offerings as it heads into the new fiscal year. This acquisition is expected to solidify CBIZ's standing as a leading full-service advisor in the U.S.

Why Was Marcum Acquired?

• Market Expansion: The acquisition solidifies CBIZ's position as the largest full-service professional services advisor to the growing middle market in the U.S. This expansion allows CBIZ to offer an unmatched breadth of services and depth of expertise, enabling access to new sectors and expanding its presence in target industries. The combined entity will have annual revenue of approximately $2.8 billion, more than 10,000 team members, and over 135,000 clients.
• Technology Integration: The acquisition enables greater investment in technology to support data-driven insights and solutions. This will drive innovation, increase efficiency, and enhance performance, allowing CBIZ to develop new and innovative data-driven products and solutions. Marcum's technology solutions will be integrated into CBIZ's portfolio, further enhancing their technological capabilities.
• Competitive Advantage: The acquisition enhances CBIZ's competitive advantage by providing an unmatched breadth of services and depth of expertise. The combined industry knowledge and resources position CBIZ as an acquirer of choice, attract and retain top talent, and offer clients innovative and actionable solutions. The transaction is expected to be accretive in 2025, contributing approximately 10% to adjusted earnings per share, thereby creating shareholder value.

Acquisition Terms

• Acquisition Price: Approximately $2.3 billion.
• Payment Method: The transaction was a cash-and-stock deal.
• Key Conditions or Agreements:
  • The non-attest business of Marcum was acquired by CBIZ, Inc.
  • The attest business of Marcum was acquired by CBIZ CPAs, a national independent CPA firm with which CBIZ has had an Administrative Service Agreement for over 25 years.
  • The transaction is expected to be accretive in 2025, contributing approximately 10% to Adjusted earnings per share.
  • The acquisition is subject to regulatory approvals and the satisfaction of other customary closing conditions.

Impact on Marcum

The acquisition of Marcum by CBIZ has led to significant changes in operations and management. The non-attest business of Marcum was acquired by CBIZ, while the attest business was acquired by CBIZ CPAs. This merger has expanded CBIZ's team to over 10,000 members, enhancing the breadth of services and depth of expertise available to clients. The integration of Marcum's operations into CBIZ's framework is expected to streamline processes and foster a more cohesive service delivery model, ultimately benefiting both employees and clients.

In terms of product offerings and services, the merger has broadened the range of services available, including accounting, tax, advisory, benefits, insurance, and technology services. This expansion allows for greater investment in advanced technology, such as CBIZ's D@taNEXUS and new AI applications, which will provide more insightful, data-driven recommendations tailored to client needs. Employee reactions have been positive, with opportunities for growth and development emphasized. Clients are expected to benefit from the enhanced services and deeper expertise, leading to improved satisfaction and loyalty.

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