Some time last evening we received a quiet little tip about a firm we rarely talk about:
Doeren Mayhew out of Troy, MI sold out to private equity on Wednesday. Press release coming soon. Junior partners are furious.
Lo and behold, this press release appears on Doeren Mayhew's website. It's dated August 23 but wasn't there when we searched for it late Friday.
Doeren Mayhew, a national CPA and advisory firm, has entered into an alternative practice structure with Audax Private Equity ("Audax"), an alternative investment manager and capital partner to middle market companies, to support the firm's future innovation and growth. Terms of the transaction, expected to close in September, were not disclosed.
Our tipster tells us it's a majority stake but has no specifics other than that. What they lack in transaction details, our tipster makes up for in juicy gossip:
Non-voting shareholders were left completely in the dark and only told by email today. The voting partners haven't even bothered to show their faces in the office since the sale. Non-voting shareholders were offered an insulting bonus that won't be paid unless they stick around for 5 years.
And of those bonuses they added:
Non-voting shareholder bonuses vary from person to person. Unrelated to book size. They're basically just playing favorites. People who they probably don't care if they leave get the minimum. People they want to stay get more even if they have no book of business.
Doeren Mayhew is #53 on both the Accounting Today Top 100 and INSIDE Public Accounting Top 100 with $137,400,000 in revenue. And growing fast according to them:
Doeren Mayhew has demonstrated significant growth in the last decade, securing the No. 53 spot on INSIDE Public Accounting's Top 100 listing of the largest U.S. CPA and advisory firms. With roots dating back to the 1930s, Doeren Mayhew's more recent growth over the past two decades has been attributable to continuous talent development, expanded service offerings, and added technical depth, achieved organically and through mergers and acquisitions.
Audax's investment provides additional capital to help Doeren Mayhew accelerate its growth and invest in enhancing the firm's service offerings, technology infrastructure, and overall employee and client experience. Through the investment, Doeren Mayhew will also look to broaden the firm's geographic footprint via continued acquisitions. The firm's current leadership team will remain in place and continue to manage operations as well as provide the strategic direction for the firm.
As with other firms who've told the private equity vampire "sure, you can come right in through that window," Doeren Mayhew will operate an alternative practice structure with Doeren Mayhew Assurance handling the audit side and Doeren Mayhew Advisors, LLC for business advisory, tax, and non-attest services. Both entities will operate under the Doeren Mayhew brand.
"The firm has demonstrated a strong track record of driving both organic and inorganic growth," said Adam Abramson, a Partner at Audax Private Equity. "We look forward to partnering with them to continue building on their momentum."
Anyone feeling some type of way about this deal is welcome to contact us to chat (anonymously). Text 202-505-8885 or send me an email.