In 2024, private equity firm Hellman & Friedman purchased Baker Tilly. After that acquisition, Baker Tilly has bought multiple regional accounting practices. Just last month, Baker Tilly completed the acquisition of Anchin, Block & Anchin, a New York-based accounting firm, and in December it bought Miami-based advisory firm Berkowitz Pollack Brant.
Additionally, the firm utilized private credit financing to back its April 2024 merger with Moss Adams. The transaction, worth $7 billion, created the sixth-largest accounting firm in the United States.
According to Bloomberg News in June 2024, Blackstone Inc. headed a lender syndicate in a roughly $1.5 billion financing. That debt carried an interest rate of 4.5 percentage points above the benchmark.
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Representatives from Baker Tilly, its private equity owner Hellman & Friedman, and Deutsche Bank each chose not to comment.
Shifting from private credit to public debt markets can offer significant advantages. Private loans, like the $1.5 billion facility led by Blackstone, often carry higher interest rates and stricter covenants. By contrast, public bonds or leveraged loans typically provide lower funding costs and greater liquidity, especially for a firm of Baker Tilly's size.
The move also signals confidence in the company's credit profile to investors. Hellman & Friedman's acquisition of Baker Tilly in 2024 and subsequent string of acquisitions - including the $7 billion merger with Moss Adams - have created a larger, more diversified accounting platform. This financial restructuring may pave the way for further expansion.
Moreover, the public debt offering allows Baker Tilly to tap a broader investor base and reduce reliance on a small group of private lenders. The success of this transaction could also encourage other private equity-backed professional services firms to pursue similar refinancing strategies.
The accounting industry has seen a wave of consolidation, with private equity firms playing a key role. Baker Tilly, now the sixth-largest U.S. accounting firm, has grown rapidly through acquisitions. Refinancing existing debt at more favorable terms is a common step after such mergers.
Public debt offerings have become an increasingly common tool for private equity-backed firms looking to replace expensive private loans. The $3 billion proposed by Baker Tilly reflects a broader pattern where companies seek lower interest rates and more flexible terms by tapping public markets. For a firm of Baker Tilly's scale, the potential savings from such a refinancing could be substantial, freeing up capital for further acquisitions or debt reduction.
The upcoming investor meetings will test market appetite for Baker Tilly's credit. If successful, the $3 billion offering would be one of the largest public debt deals by an accounting firm in recent years.
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