Grant Thornton Accelerates Growth with Strategic Private Equity Investment from New Mountain Capital

Grant Thornton, the 7th largest accounting firm in the U.S., has accepted a significant investment from New Mountain Capital, marking the largest private equity transaction in the accounting profession to date. This partnership aims to return capital to partners, buy out retirement obligations, and build an investment war chest. Grant Thornton will operate in an alternative practice structure, enhancing its market value and accelerating its strategy for growth in talent, technology, and capabilities - Source: Inside Public Accounting.

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New Mountain Capital's strategy focuses on investing in market-leading companies within growth sectors that are less sensitive to economic cycles, characterized by strong cash flows, high barriers to entry, and significant growth potential. Their investment in Grant Thornton aligns with this strategy, leveraging Grant Thornton's position in the accounting and consulting industry. New Mountain aims to build on Grant Thornton's strengths, driving growth without relying heavily on debt, thus avoiding the risks associated with high leverage. This approach to value creation is about enhancing and expanding business operations, which is key to their involvement with Grant Thornton.

Defensive growth industries are sectors that tend to remain stable or even grow during various economic cycles, including downturns. These industries often provide essential goods or services that remain in demand regardless of the broader economic environment. Investments in such sectors are seen as having strong downside protection while still offering the potential for growth, making them attractive to investors seeking both stability and opportunities for value creation.