Reverence Capital Buys Eide Bailly Majority Stake for $1.8bn

Reverence Capital Partners has secured a majority ownership in Eide Bailly, a prominent US accounting and professional services firm, in a transaction valuing the business at approximately $1.8 billion. This significant deal underscores the sustained investor appetite for established players in the accounting sector, particularly those serving the mid-market.

The agreement will see Reverence Capital Partners, alongside its co-investors, assume control of the Minneapolis-based firm. Eide Bailly, recognized for its comprehensive audit, tax, and consulting services, aims to leverage this new partnership to significantly accelerate its strategic initiatives. Key areas targeted for enhanced investment include the integration of advanced technologies, such as artificial intelligence, and the expansion of its advisory and consulting capabilities.

With reported revenues of roughly $840 million in its most recent fiscal year, Eide Bailly has articulated ambitious growth objectives, targeting a doubling of its revenue within the next three to four years. This transaction is structured to facilitate that expansion, providing the capital and strategic support necessary to achieve these goals in an increasingly competitive market.

The accounting and professional services sector has witnessed a notable uptick in private equity involvement. Firms operating outside the dominant "Big Four" are increasingly exploring strategic partnerships, divesting minority or majority stakes to fuel growth, pursue consolidation opportunities, and upgrade their technological infrastructure. This trend is particularly pronounced as businesses seek to scale operations and enhance service delivery in a digitally transformed environment.

To navigate regulatory requirements, particularly those concerning auditor independence, Eide Bailly will implement an alternative practice structure. This will involve segregating its audit practice, which will remain within a licensed CPA entity, from its non-audit service lines. The private equity investment will be housed within the latter, ensuring compliance while enabling focused growth.

This acquisition by Reverence Capital Partners aligns with a broader pattern of consolidation and private capital deployment within the mid-market professional services arena. Such platforms are proving increasingly attractive to investors seeking stable revenue streams and opportunities for operational enhancement and market share expansion. The deal is anticipated to finalize in the third quarter, pending standard regulatory approvals.