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A group of investors led by Blackstone is acquiring a majority stake in the US accounting firm Citrin Cooperman. This is a deal that gives the target company an enterprise value of over $2 billion and represents a significant increase in valuations across the sector.

Blackstone acquired the shares from smaller rival New Mountain Capital, according to two people familiar with the matter. This is the private equity group’s first $1 trillion deal in an industry that is experiencing a wave of takeover activity.

Over the past three years, a third of the largest U.S. accounting groups have moved into private equity fund portfolios, with Citrin Cooperman becoming the first to change hands twice.

The deal will be announced later on Tuesday, according to the people. The Blackstone-led group will hold an ownership stake of more than two-thirds and bring in smaller investors to keep Blackstone’s stake below 50 percent and address regulatory concerns about the independence of Citrin Cooperman’s audit business.

The audit accounts for around 20 percent of group sales. More than half of the fee income comes from tax activities and around a quarter from consulting activities.

New Mountain was one of the first major private equity groups to invest in the U.S. accounting sector when it acquired a majority stake in Citrin Cooperman in late 2021, giving the accounting group an enterprise value of around $500 million. Its sale was highly anticipated in the industry to signal valuations.

Two people familiar with the matter said Blackstone bought Citrin Cooperman at a multiple of about 15 times earnings before interest, taxes, depreciation and amortization, compared with New Mountain’s original acquisition at 11 times Ebitda.

A person familiar with Blackstone’s thinking said the company is a lower-risk venture than when it was acquired by New Mountain because management has successfully navigated the transition away from the old partnership model and made significant investments in technology.

Private equity investments have accelerated merger and acquisition activity in accounting. Citrin Cooperman had sales of $350 million when New Mountain bought the company three years ago, according to people familiar with the numbers. That has since grown to about $850 million in 2024 through a series of additional acquisitions of regional accounting firms, they said, putting the company among the 20 largest companies in the United States.

Citrin Cooperman’s partners will re-vest the majority of their shares in the company, but will generate income by selling some shares, people familiar with the Blackstone agreement say. The partners were informed of the details of the deal on Monday.

Management is expected to increase its share over time by granting performance bonuses.

After the Citrin Cooperman deal, New Mountain last year acquired a majority stake in the much larger U.S. accounting firm Grant Thornton, whose clients tend to be larger than the small and medium-sized companies targeted by Citrin Cooperman. Last week, Grant Thornton US acquired its Irish sister company in a deal financed by New Mountain.

Blackstone and New Mountain declined to comment.