Accordion to Buy Merilytics, as PE Firms Turn to Value Creation

‘Much of the work in private equity has shifted to portfolio company improvement,’ says Michael Choe, CEO of Charlesbank, which invested in Accordion in September.

By Mary Kathleen Flynn, Editor-in-Chief, PE Hub

Accordion, a New York-based consultancy that provides CFO services to hundreds of private equity firms, is expected to announce later this morning that it has agreed to acquire Merilytics, a Hyderabad, India-based provider of analytics, data management and business intelligence services.

To learn more about the deal and the trends driving demand for CFO services, PE Hub conducted exclusive interviews with Nick Leopard, the founder and CEO of Accordion, and Michael Choe, the managing director and CEO of Charlesbank Capital Partners, an investor in Accordion.

The deal comes at a time when private equity firms are more focused on value creation than ever before, given the challenges of the current economy and the slowdown in dealmaking.

“The M&A and leveraged capital markets have been dislocated since the beginning of 2022,” Choe told PE Hub. “The combination of slowing earnings growth, overall reduction in debt availability, increase in cost of debt and the slowdown in new platform activity means much of the work in private equity has shifted to portfolio company improvement. When this type of shift happens, improving FP&A [financial planning and analysis]analytics, liquidity forecasting, transformation and equipping the office of the CFO with the right technologies becomes critical.”

Leopard added: “Private equity firms have increasingly put a spotlight on the significant value creation benefits from having a deliberate master data governance strategy, and this being the foundation of advanced analytics to drive the prioritization of all the value creation levers at their disposal. This data and analytics foundation ‘table stakes’ is not just to appease the board demands, but when done right, should be a massive tool for the front lines of any portfolio company to make day-to-day decisions in real time.”

Founded by Leopard in 2009, Accordion provides financial and technology consulting services focused on CFOs for more than 250 private equity firms and their portfolio companies. The company has annual revenues of $200 million.

The Merilytics acquisition marks the company’s fourth and largest acquisition. The deal also marks the first add-on since Charlesbank, based in Boston, and Motive Partners, based in London, bought a majority stake in Accordion in September 2022. At that time, FFL Partners, based in San Francisco, exited Accordion, reportedly realizing a return of 4.6x, after four years of holding a minority stake.

“The modern CFO’s role may be among the hardest, but most critical to the value creation process,” Choe explained. “CFOs know they need to digitize, and that technology will only get more important as a key source of value-driving insights. Merilytics expands Accordion’s ability to provide end-to-end data and analytics solutions and support to clients, which is critically important to empowering PE sponsors and portfolio companies’ value creation journey.”