US private equity consultancy CMF Associates bought by CBIZ

16 June 2017 5 min. read
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US professional services firm CBIZ has purchased CMF Associates, a Philadelphia based private equity consultancy. The move adds $19 million in revenues and a team of more than 75 staff to CBIZ's headcount of more than 4,600.

Founded in 2001, CMF Associates provides transaction and transition-focused financial, operational, and human capital solutions to private equity firms and their portfolio companies across North America. Since launching, the consulting firm has served more than 135 private equity funds across more than 500 companies, mainly in the middle market, with a range of financial advisory services.

As part of the firm’s strategy focused on accelerating its growth, CMF* has decided to join forces with a major player in the US consulting market. Its new parent, publicly listed CBIZ, is one of the largest accounting, advisory, insurance brokerage, and valuation companies in the country – the firm operates with more than 100 offices in 33 states. 

“CMF sought a committed partner who shared our growth-oriented vision of scaling our position as a premier service provider to private equity and their expanding portfolio. We found in CBIZ an advocate that will provide us with offices across the country, complementary tangential services and the resources to drive portfolio value creation in a more comprehensive way and on a national scale”, said Thomas Bonney, founder and managing partner at CMF and an alumni of Deloitte.

The addition of CMF bolsters CBIZ’s services portfolio with, among others, expertise in mergers & acquisitions, include post-merger integration, buy- and sell-side carve out, preparation for exit, benefits management, turnaround support and interim executive management.

CMF Associates

“The acquisition of CMF represents a strategic step in establishing CBIZ as an industry leader of professional business services to middle-market focused private equity firms”, reflected Jerry Grisko, CBIZ’s CEO.

Private equity industry

As part of the integration, Bonney and CMF’s other leaders will become leaders in CBIZ’s national private equity practice, as the acquirer aims to expand its service and breadth of expertise in an industry which Grisko describes as “one of the fastest growing in the US.” Globally, the private equity sector is booming – total assets under management reached a record level of $2,500 billion last year, according to The Boston Consulting Group, lifted by strong cash piles, improving economic fundamentals and a relatively low interest rate. The industry however too is facing a number of challenging trends, including market normalisation following lower buyout volumes and growing concern about the valuations of startups. 

The deal follows shortly on another transaction closed by CBIZ, that of Slaton Insurance, one of the oldest insurance agencies in South Florida, which added 14 employees and $2.6 million in revenue to its roster. This year’s two bolt-ons to date build however on a bumper M&A year for the firm in 2016, when it acquired six companies: Millimaki Eggert, The Seff Group, Actuarial Consultants, Flex-Pay Business Services, The Savitz Organization, and the employee benefits wing of Tennessee-based Ed Jacobs & Associates.

Financial advisor: Equiteq

The acquisition of CMF Associates was advised on by Equiteq, a firm specialised in M&A advisory to the consulting industry. While CMF initially hired Equiteq to assess its value and attractiveness to the market, the two companies extended their relationship, eventually seeing Equiteq serve as financial advisor to the deal. “We are extremely grateful to the Equiteq team for their expertise and tenacity in finding the right partner in CBIZ, and for negotiating a transaction that met with the objectives of our shareholders,” said Bonney.

Reflecting on the cooperation with Equiteq, he remarked, “We were impressed with their knowledge of the consulting sector and their approach to understanding our business. Equiteq provided the right advice at the right time during the process; our initial decision in selecting Equiteq was validated throughout the transaction.”

Earlier this year Equiteq played a role in the sale of UK-based outsourcing consultancy Aecus to The Hackett Group, an international consutling player. The company is led by David Jorgenson, who succeeded Paul Collins in May this year – he founded the consultancy in 2005 after a career with WCI Consulting (which he founded and sold off to private equity house in 2002) and A.T. Kearney. 

* Interestingly, the name CMF is inspired by a position in football (soccer in the US). CMF stands for ‘center mid-field’, a position that is regarded as key for orchestrating the play and creating scoring opportunities, according to the firm's own website.