In October 2021, New Mountain Capital invested in Citrin Cooperman at a reported enterprise value of approximately USD 500 million. A little more than three years later, an investor group led by Blackstone agreed to acquire New Mountain’s interest in a transaction reported to value Citrin at more than USD 2 billion. Revenue had increased from approximately USD 350 million to around USD 900 million, supported by more than twenty acquisitions during New Mountain’s ownership period. The Wall Street Journal described the transaction as the first time a private-equity investor had flipped an audit firm. (Wall Street Journal – Blackstone Buying Stake in Accounting Firm Citrin Cooperman)
For private equity in accounting, the transaction represented an important milestone. Investors had already established that they could enter the profession through alternative practice structures, provide liquidity to partners and finance consolidation without owning the regulated attest entity directly. The unresolved part of the model was exit. I explored that challenge in The Exit Problem. Citrin became the cleanest counterexample. New Mountain now records its October 2021 investment as fully realised in April 2025, with another institutional investor willing to acquire the platform and continue building it. (New Mountain Capital – Citrin Cooperman Advisors)
The straightforward interpretation is that New Mountain invested, provided capital, financed acquisitions, professionalised the business and sold its stake at a much higher valuation. Much of that description is accurate, but Citrin’s development before 2021 makes the causality less simple. The firm had spent decades acquiring other practices, expanding geographically, broadening its service portfolio and developing a more formal management structure before institutional capital arrived. It had already started solving several of the problems that other accounting roll-ups would later encounter only after their acquisition programmes were under way.
The success of Citrin’s first private-equity cycle may therefore have been determined partly before private equity arrived. New Mountain materially changed the speed, scale and financial structure of the firm, but it was accelerating an organisation that already possessed considerable acquisition experience, leadership depth and appetite for change. For boards now considering external capital, this shifts part of the analysis away from valuation, partner liquidity and acquisition capacity. The condition of the institution before the transaction may be as important as the capital structure created by it.
The Capabilities Predated the Capital
Citrin had been combining with other professional-services firms almost from its creation. Its corporate history records repeated transactions throughout the 1980s, 1990s and 2000s, followed by another wave during the decade before New Mountain invested. The firm expanded beyond New York, developed regional businesses, joined Moore Global and broadened into valuation, consulting and other advisory activities alongside tax and assurance. Revenue moved from approximately USD 18 million in 2000 to more than USD 80 million by 2008 and subsequently passed USD 100 million, USD 200 million and USD 300 million before the 2021 transaction. (Citrin Cooperman – Our Company and History)
Repeated acquisitions gave Citrin experience that was difficult to see in the financial statements but potentially important once New Mountain arrived. Buying a professional-services firm requires judgments about partner fit, client ownership, local culture, compensation, succession and how much standardisation an incoming practice can absorb without destroying what made it commercially successful. Some attractive firms should not be acquired at all. By 2021, Citrin had spent decades encountering variations of these problems and had developed a pattern of acquiring, absorbing and continuing to grow rather than building its first integration capability at the same time as the private-equity strategy.
Its first serious private-equity discussions provide a useful example. In 2020, Citrin entered negotiations with another investor and eventually walked away despite what the firm later described as a significant financial offer. Management concluded that the proposed investor wanted too much control over how the business would operate after the transaction. The decision was consistent with the acquisition discipline the firm had developed elsewhere: financial terms were not enough if the organisations did not fit. When New Mountain subsequently invested, the relationship had already existed for years and the stated objective was to accelerate an existing strategy rather than replace it. (Citrin Cooperman / Inside Public Accounting – Tales From the Private Equity Front)
Management had also been evolving before 2021. Citrin appointed a chief executive as early as 2008 when the growing organisation required more dedicated management capacity, and operating succession continued to develop as the firm became larger. By the time New Mountain invested, Alan Badey was already president and subsequently moved into the CEO role. The exact chronology of titles is less relevant than the broader development: Citrin was already separating institutional management from the founders and building leadership capacity around a business that had outgrown the economics and organisational simplicity of its earlier partnership. (Accounting Today – Citrin Cooperman Names New CEO; Citrin Cooperman – 2020/21 Year in Review)
None of this made the later outcome inevitable. Firms can complete many acquisitions without becoming integrated institutions, and professional management can add bureaucracy without improving performance. Citrin nevertheless entered the New Mountain transaction with a longer history of institutional development than the 2021 ownership change alone would suggest. The 2021 transaction did not begin Citrin’s institutional development. It entered an organisation that was already partway through it.
New Mountain Changed the Speed
The effect after October 2021 was dramatic. Within six months, Citrin had completed five strategic transactions. By early 2023, the number had reached ten transactions in fifteen months, collectively adding more than USD 200 million of revenue. The combination with Berdon alone brought approximately USD 110 million of revenue and around 450 partners and professionals, creating an organisation expected to generate more than USD 600 million annually. The strategic direction had not fundamentally changed, but the pace at which Citrin could pursue it had. (New Mountain Capital – New Mountain Capital & Citrin Cooperman Announce Strategic Partnership; Citrin Cooperman – Citrin Cooperman and Berdon Join Together)
A conventional partnership could theoretically have continued along the same path more slowly, but the financing constraints would have been different. Acquisitions, technology and new service capabilities ultimately compete with annual partner distributions when investment is funded primarily through retained earnings and partner capital. Institutional ownership changed that trade-off. Citrin could deploy substantially more capital into transactions and longer-term capabilities without financing every strategic move through a reduction in the current generation’s distributable income.
The governance environment also became more formal. Citrin has described the private-equity period as bringing greater financial discipline, stronger accountability around budgets and faster decision-making. Responsibilities became more explicit across services, markets, regions and commercial growth. In 2025, the firm created its first Chief Growth Officer role and established clearer accountability for regional P&Ls. The business remained dependent on professionals winning clients and delivering work, but more of the machinery used to allocate capital, manage performance and coordinate growth moved away from informal partnership mechanisms and toward institutional management. (Citrin Cooperman – Strategic Leadership Appointments)
New Mountain also supported expansion beyond the traditional accounting core. Citrin developed technology services, outsourced finance capabilities and other advisory businesses alongside tax and assurance. By the time Blackstone arrived, it was buying something materially different from the regional firm New Mountain had entered. The first cycle combined capabilities Citrin already possessed with capital and governance mechanisms that allowed them to operate at a different speed. Neither explanation on its own is sufficient to explain the outcome.
From Acquisition Platform to Institution
By the time Blackstone announced its investment, Citrin served more than 15,000 clients and had become one of the largest accounting and advisory firms in the US middle market. Thousands of recurring client relationships, relatively limited concentration and a fragmented acquisition market produced a financial profile that another institutional investor could understand. Blackstone was no longer underwriting whether external capital could coexist with the accounting profession. New Mountain and other first-wave investments had already reduced that uncertainty. It was underwriting whether Citrin’s much larger platform could continue creating value through another ownership cycle. (Blackstone – Citrin Cooperman to Receive Significant Investment)
Acquired revenue becomes part of the organisation immediately. Client trust, operating practices and commercial relationships move much more slowly. Citrin has publicly described a “one firm” ambition built around common systems and procedures while acknowledging that integrations can require twelve to eighteen months. A platform completing transactions continuously is therefore operating several generations of integration at the same time. Every new acquisition increases revenue on day one while creating organisational work that can take years to complete. (Citrin Cooperman – Building What’s Next: Strategic Shifts Redefining Accounting)
I explored the same problem from the opposite direction in The Transferability Problem. Revenue, headcount and offices can be acquired immediately. Institutional trust cannot. The economics of consolidation ultimately depend on clients, professionals and future owners becoming increasingly attached to the combined institution rather than remaining attached only to the local firms and individuals through which they entered it.
Citrin provides some evidence that this migration has started. Leaders arriving through acquisitions have subsequently taken on responsibilities inside the wider institution. Jeffrey Kovacs joined through the Berdon transaction and later became president of Citrin Cooperman & Company LLP, the separately regulated attest firm. When HW&Co. joined in 2025, its president and CEO Brandon Miller became managing partner of Citrin’s Ohio offices and subsequently assumed broader Midwest responsibility. These appointments do not prove that every acquisition has been fully integrated, but they show that leadership authority is capable of moving beyond the boundaries of the original Citrin organisation. (Citrin Cooperman – Jeffrey Kovacs Appointed President of Citrin Cooperman & Company LLP; Citrin Cooperman – HW&Co. Acquisition)
Public revenue numbers cannot show how far this process has gone. They do not reveal whether cross-selling improved, how completely systems were standardised, whether pricing power increased or whether acquired clients increasingly use the wider platform. They show that Citrin became much larger and coherent enough for another investor to underwrite the next ownership cycle. That is meaningful evidence of transferability, but it remains only partial evidence that the acquired businesses have become one institution.
What the First Cycle Actually Proved
The financial outcome of the New Mountain period was exceptional. A reported enterprise value of approximately USD 500 million became more than USD 2 billion in a little more than three years. Revenue rose from roughly USD 350 million to around USD 900 million, while a succession of acquisitions added geographic reach, clients and capabilities. New Mountain also benefited from entering at a point when private-equity ownership of large accounting firms remained relatively novel and exiting after the market had become substantially more comfortable with the asset class.
The reported valuation multiple increased alongside revenue. Early investors could therefore benefit both from improvements inside the company and from a category rerating as accounting platforms became more familiar institutional assets. I described this change across the wider market in The Institutional Test. First-wave investors entered at lower multiples and could benefit heavily from acquisition growth and market acceptance. Later investors start after part of that upside has already been realised, making organic growth, integration, productivity and institutional quality progressively more important. (Financial Times – Blackstone Joins Private Equity Deal Wave in US Accounting Sector)
The first Citrin cycle therefore proved several things without proving everything. External capital could coexist with professional-ownership constraints. A large accounting firm could increase its acquisition pace materially without losing enough coherence to prevent a subsequent sale. New Mountain could exit through a conventional transaction with another sponsor. Citrin had become sufficiently understandable as an institutional asset that Blackstone was prepared to pay materially more for the next stage of the platform.
It did not prove that private equity could produce the same outcome from any comparable accounting partnership. Firms entering external ownership bring very different levels of acquisition experience, leadership capability, commercial discipline and organisational maturity. Some will use capital to accelerate systems and behaviours that are already well developed. Others will be trying to create those systems while simultaneously buying firms, changing governance and adapting to a more demanding capital structure. Public evidence cannot isolate how much of Citrin’s outcome came from pre-existing capability, post-transaction execution, acquisition growth or multiple expansion. The case therefore supports an institutional-readiness hypothesis rather than proving a general rule.
Blackstone Bought a Harder Starting Point
Blackstone entered under more demanding economics. The reported valuation exceeded USD 2 billion and the valuation multiple had already increased materially from New Mountain’s entry point. Citrin was larger, more diversified and arguably easier to underwrite because it had already survived the first transition to external ownership. Those improvements reduce some risk for the new investor, but they also mean that much of the easiest institutional progress has already been reflected in the price.
The financing structure increases the performance requirement. S&P Global Ratings described a USD 1.05 billion senior secured facility associated with the transaction, consisting of a USD 775 million term loan, a USD 50 million delayed-draw term loan and a USD 225 million revolving facility. S&P assigned Citrin a B- issuer credit rating and expected leverage to remain high initially. Its stable outlook incorporated organic revenue growth of four to six percent, successful integration, cost efficiencies, free-cash-flow generation and eventual deleveraging. (S&P Global Ratings – Citrin Cooperman Advisors Assigned B- Issuer Credit Rating)
High leverage does not mean Citrin is in distress. It means more claims now sit against future cash flow. Technology investment, professional compensation, continued acquisitions, debt service and deleveraging all have to be supported by the same economic system. Blackstone also cannot recreate the original transition from a conventional partnership to institutional ownership or benefit to the same extent from proving that private equity can own an accounting platform. Those elements of the first cycle are already behind the firm.
Acquisitions can still create substantial value, and the US market remains fragmented enough to support further consolidation for years. But the larger Citrin becomes, the less another acquisition tells us about the quality of the combined institution. A platform approaching or exceeding USD 1 billion of revenue eventually has to demonstrate that the businesses become worth more together than the amount of revenue purchased through successive transactions.
The Next Value Must Come From the Institution
Citrin has acknowledged that organic growth was difficult during 2025 and that it becomes increasingly important as the organisation gets larger. The firm has responded with a more explicit commercial structure, including the Chief Growth Officer role, while expanding areas such as outsourced CFO services, Digital Services, and Business Management and Family Office. The direction increasingly shifts from adding client relationships through acquisition toward generating more value from relationships already inside the platform. (Citrin Cooperman – Building What’s Next: Strategic Shifts Redefining Accounting)
Acquisition growth and organic growth test different capabilities. A USD 50 million acquisition adds an existing USD 50 million revenue stream when the transaction closes. Generating the same amount organically requires clients to change behaviour. Existing tax clients need to buy advisory work. Specialists inherited through one acquisition need access to relationships created by another. Partners have to introduce colleagues into clients they historically controlled themselves. New capabilities need to generate enough value that clients increase their spending with the institution rather than merely continue buying the service they purchased before the acquisition.
Artificial intelligence increases the pressure to make that transition. Citrin has publicly acknowledged that firms concentrated on compliance may face pricing pressure as AI reduces the amount of human effort required to perform recurring work. Its enterprise AI initiative with Ode and Anthropic is intended to identify applications across tax, accounting, advisory and internal operations. Faster delivery alone does not guarantee economic improvement. Clients may expect lower prices, technology introduces new costs, and capacity released by automation creates little value if the firm cannot redirect it toward additional demand or more valuable work. (Citrin Cooperman – Accelerates AI Transformation with Ode with Anthropic)
A client base of more than 15,000 relationships gives Citrin a significant installed platform through which new services can potentially be distributed. Its economic value depends increasingly on whether those relationships belong to Citrin as an institution or remain attached principally to the individual partners and practices through which they entered the organisation. Capital can finance new capabilities and AI systems. It cannot guarantee cross-selling, commercial coordination or client trust. Those remain institutional capabilities, and they will determine how much of the second ownership cycle can be created without relying primarily on further acquisitions.
What Happens Next?
Citrin continues to consolidate. In July 2026, it acquired substantially all the assets of Boston-area accounting and advisory firm LGA, adding approximately 150 professionals. Acquisitions are therefore continuing under Blackstone rather than ending with the New Mountain period, and there is no obvious reason for the strategy to stop while the US accounting market remains so fragmented. (Citrin Cooperman – LGA Acquisition)
The more useful evidence will increasingly sit underneath the transaction count. Organic growth should improve if acquired client relationships are becoming institutional relationships. New advisory businesses should increasingly reach clients that entered through tax, accounting and assurance. Common systems, regional P&Ls and more explicit management structures should eventually produce operating benefits rather than simply additional central cost. Leaders from acquired firms should continue moving into broader responsibilities, while debt should decline without forcing the organisation to underinvest in technology and future capabilities.
Citrin also provides a useful contrast with Case Study 41: EisnerAmper and the Test of the Second Ownership Cycle. EisnerAmper’s second liquidity event took place through a continuation vehicle in which TowerBrook remained the sponsor. Citrin changed financial owners entirely. Blackstone therefore provides a cleaner test of whether a different investor can inherit the platform, its management systems and its acquisition strategy without rebuilding the institution around a different operating logic.
Leadership will form part of that test without defining it. Executive responsibility had already moved beyond the founding generation before the first sponsor arrived, and co-founder Joel Cooperman left shortly after the Blackstone transaction. New Mountain operated with the benefit of both the new management structure and the accumulated experience of the founder who had spent decades building the firm. Blackstone will see whether acquisition judgment, integration capability and commercial ambition continue to reproduce themselves after that transition has been completed.
Closing Thoughts
Citrin Cooperman looks, from a distance, like one of the cleanest demonstrations that private equity can transform an accounting partnership. New Mountain invested at a reported enterprise value of approximately USD 500 million, the firm grew rapidly and completed a large number of acquisitions, and Blackstone subsequently acquired New Mountain’s interest at a reported valuation exceeding USD 2 billion. The first sponsor entered, created liquidity, financed substantial expansion and exited to another financial investor. The basic PE mechanism worked.
The history before 2021 makes the case more useful. Citrin had already spent decades buying firms, entering new markets and expanding beyond its original accounting services. Its management structure had been evolving as the firm grew. Succession was already under way. The organisation had enough confidence in its direction to reject an earlier private-equity offer when the investor appeared to be the wrong fit. New Mountain did not need to invent an acquisition strategy or create the first generation of institutional management before it could start deploying capital.
External capital then gave Citrin something it had not previously possessed at the same scale: the ability to execute that strategy much faster while introducing greater financial discipline and a different governance environment. The extraordinary growth of the first ownership cycle came from the interaction between the institution Citrin had already become and the capital structure New Mountain introduced. Describing either side as the sole explanation misses what the case actually shows.
The success of the first private-equity cycle may therefore have been determined partly before private equity arrived. Firms can copy the alternative practice structure, raise acquisition debt and hire professional executives. They cannot instantly reproduce decades of acquisition experience, integration knowledge, client relationships, leadership development and organisational learning. Some firms entering the current private-equity wave will already possess much of that capability. Others will be trying to build it while their organisation is expanding at a pace they have never previously experienced.
Blackstone now inherits the next stage. The firm is larger, the entry valuation is higher and the capital structure is more demanding. Organic growth, cross-selling, advisory expansion, integration and technology-enabled productivity will matter more than they did during the first cycle. If Citrin continues compounding under those conditions, the evidence that private equity accelerated a genuinely institutional platform will become much stronger. If it does not, the first cycle will still have been a very successful investment, but the lesson will be narrower: private equity proved highly effective at accelerating Citrin Cooperman, not necessarily that the same capital can manufacture another Citrin Cooperman somewhere else.
What This Means for Boards
Boards considering private equity should not begin with the transaction. Valuation, partner liquidity, rollover equity, governance rights, debt capacity and acquisition funding all deserve careful attention, but they describe the financing event rather than the institution that will have to perform after it. Citrin suggests that institutional readiness deserves its own assessment before those discussions dominate the agenda.
The first questions are operational rather than financial. Does the firm already know how to acquire and integrate businesses? Has the strategy been defined independently of the investor? Can management make decisions across the institution rather than primarily negotiate between powerful partner groups? Has succession moved beyond the founders? Can incoming leaders gain genuine authority? Are client relationships capable of moving across services and partners? Is organic growth already evidence that the firm can create value beyond adding more revenue through acquisitions?
Two firms with similar revenue and profitability can receive similar amounts of external capital and produce very different outcomes. One may use the capital to accelerate capabilities that already exist. Another may discover that the funding allows it to acquire businesses faster than its management, integration systems and commercial model can absorb them. The transaction may initially make both firms larger while gradually exposing very different levels of institutional quality.
Private-equity investors conduct extensive due diligence on the asset they are preparing to buy. Boards should conduct an equally demanding assessment of the institution that is about to receive the capital. The central question is not only what private equity will change after the transaction, but what the firm is already capable of before private equity arrives. Citrin’s first ownership cycle suggests that the answer may explain a significant part of the eventual outcome.
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Sources
Company Publications
- Citrin Cooperman – Our Company and History
- Citrin Cooperman – 2020/21 Year in Review
- Citrin Cooperman / Inside Public Accounting – Tales From the Private Equity Front
- New Mountain Capital – New Mountain Capital & Citrin Cooperman Announce Strategic Partnership
- New Mountain Capital – Citrin Cooperman Advisors
- Citrin Cooperman – Citrin Cooperman and Berdon Join Together
- Citrin Cooperman – Jeffrey Kovacs Appointed President of Citrin Cooperman & Company LLP
- Citrin Cooperman – HW&Co. Acquisition
- Citrin Cooperman – Strategic Leadership Appointments
- Citrin Cooperman – Building What’s Next: Strategic Shifts Redefining Accounting
- Citrin Cooperman – Accelerates AI Transformation with Ode with Anthropic
- Citrin Cooperman – LGA Acquisition
- Blackstone – Citrin Cooperman to Receive Significant Investment
Independent Reporting
- Wall Street Journal – Blackstone Buying Stake in Accounting Firm Citrin Cooperman
- Accounting Today – Citrin Cooperman Names New CEO
- Financial Times – Blackstone Joins Private Equity Deal Wave in US Accounting Sector