Our CBIZ Saga
- Ryan Bunn
- 6 hours ago
- 3 min read
A takeover ends our engagement with CBIZ — Management chose to sell rather than raise the capital the business needed — The value we identified will now be created in private hands.
OUR CBIZ SAGA
Our active engagement with CBIZ ended abruptly, with the business announcing a takeover by Grant Thornton and private equity partner New Mountain Capital on July 29, 2026. CBIZ will exit the public markets at a price of $55 per share, barring a higher bid before the end of the go-shop period on August 27, 2026.
Our Involvement
We engaged with CBIZ starting in mid-June 2026, proposing they issue equity in the public markets. Our view was that CBIZ was over-levered, unable to continue the M&A that had created shareholder value for years, and trading at a price that did not reflect what the business was worth.
We received no response from the company and published our letter and investor presentation.
A Decade of Compounding
We have followed CBIZ for nearly a decade. For most of that time, the business was a steady compounder, adding a few points of acquired growth to low-single-digit organic growth, and funding that M&A out of free cash flow. The model worked because the acquisitions were small and the balance sheet was conservatively managed.
This changed in late 2024 with the Marcum acquisition. CBIZ paid roughly $2.3 billion for Marcum, financing the deal with shares and over $1 billion in debt.1 The acquisition made strategic sense, adding new capabilities and geographies, and creating the 7th largest accounting firm in the US.2
Whether or not CBIZ overpaid for Marcum, the real problem was capital allocation after the deal closed.
The Capital Allocation Error
Instead of paying down debt, as deleveraging required, CBIZ repurchased shares. Over $160 million went to buybacks in 2025, including purchases under partner repurchase rights, at an average price near $68 per share. Another $30 million followed in the first half of 2026. Cash that could have reduced leverage left the balance sheet while the shares were still expensive.
Shares peaked in February 2025 at $89 a share, well after the acquisition of Marcum. But a revenue miss, a guide-down, and high leverage turned an ordinary disappointment into a free fall. Shares entered 2026 near $52 per share, then fell further, driven by the AI-related selloff of software and accounting names, bottoming near $25 in late March 2026.
What We Proposed
We acquired shares at $35 per share and shared our thesis publicly on July 7, 2026. We recommended that CBIZ sell shares to raise equity capital, deleverage, and return to M&A-driven growth.
The proposal was counterintuitive: selling equity at a depressed price is dilutive, but, by restoring the ability of the business to compound, we viewed this as the higher-returning path in the long run.
Our thesis was grounded in an understanding of the industry. The US accounting industry is consolidating rapidly. AI adoption will widen the gap between leading players and local and regional competitors, ultimately accelerating consolidation. To be a winner, CBIZ needed to be able to continue its 20-year track record of M&A.
The Outcome
CBIZ management appears to have understood their competitive disadvantage. With an over-levered balance sheet and no ability to conduct M&A, the business was not only stuck at GDP-level growth but at risk of being left behind by its better-financed competitors.
Instead of pursuing our proposal, staying public, and consolidating the market under the CBIZ banner, management sold. Grant Thornton and New Mountain will supply the capital, harvest the cost synergies, and own the upside, while public shareholders receive $55 per share and exit.
We are vindicated in our view that the business needed capital to create future value. Unfortunately, this capital will now come from the private markets. Given the sale price is roughly 25% lower than where shares traded just one year ago, management’s decision feels like capitulation.
Mixed Results
For long-term CBIZ shareholders, this outcome is a disappointment. Prior to announcing the Marcum deal, CBIZ’s shares traded at $86. The company is being sold for $55. Management’s decisions on the Marcum deal, the buybacks, and the exit valuation each destroyed value.
CBIZ’s shares traded both in excess of, and well below, the business’s intrinsic value over a 2-year period. Capitalizing on this mispricing was an opportunity that highlights the benefit of investing in small-cap markets. These markets are not efficient. We earned a 57% return on our capital in less than a month.
Combining the market’s mood swings with the ability to engage with management teams and guide long-term, value-creating capital allocation can be a winning combination. Although we wish the outcome had been long-term compounding in CBIZ’s shares, we’ll take the near-term result.
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