1st March 2022 – ARX Equity Partners (“ARX”), a Central European lower-mid market private equity specialist, today announces the completion of the majority acquisition of Hungarian professional services company Klient Holding Kft, which is part of the WTS global network (“Klient Group”).
Klient Group was originally founded in 1998 by Gyorgy Korosi and Zoltan Lambert, as an outsourcing accounting and payroll services provider. Klient Group currently generates sales in the region of ~€ 5million with more than 120 employees, and is now a Top 10 accounting, payroll and tax services provider in Hungary, predominantly servicing local subsidiaries of large multinational companies.
The financial terms of the deal agreement were not disclosed. Klient Group will use the capital invested by ARX to drive long-term growth initiatives, which include accelerating the development of its suite of service offerings, considerable investment into talent and technology and strategically expanding via organic growth and targeted mergers and acquisitions.
This acquisition illustrates ARX’s core investment strategy to build local champions through building on a best-in-class platform to create one of the top independent accounting firms in Hungary and CEE more broadly, through continued organic growth and additional add-on acquisitions. Accounting firms represent attractive investment opportunites for private equity funds, as their operations are recession-resiliant owing to the low operational risk and recurring cash flow status. The industry is also poised for continued growth as it transitions to a more advisory-oriented, service based model.
For this transaction, ARX agreed to partner with the company´s existing strong management team who will continue to lead the future growth and development of the Company. ARX has also named former KPMG Hungary Managing Partner, Robert Stollinger, as Non-Executive Chairman of the Board. Other board members include former-KPMG alumni such as Bela Lendvai-Lintner and Zoltan Lambert, who will continue to lead the Klient Group.
This deal is a further demonstration of the increasing interest for private equity investors in the accounting sector. ARX, through Klient Group intends to acquire a second domestic accounting firm during the next six months. It is ARX’s strategic intention to build the largest Hungarian accounting services company with in the next five years.
Radil Stefovski, Director at ARX Equity Partners, commented: “With further reliance on outsourced accounting, clients will increasingly expect accounting and tax professionals to become ‘holistic advisers’ rather than simply being transactional accountants. With its track record of solving complex cross-boarder accounting, tax and compliance issues, Klient Group is well positioned to capitalise on this trend of transforming a traditional accountant into a business advisor and with our support Klient Group should take its customer service to the next level. Additionally, we see Klient Group as the right consolidation platform. It represents a solid base and operates within a fragmented market, well positioned for consolidation and with many companies facing succession issues.”
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