Top SPAC Auditors Growing Market Share Through Acquisition

The top two auditors of SPACs, Marcum and Withum, are growing their businesses through firm acquisitions.

Marcum and RotenbergMeril

On February 1, 2022, Marcum announced that New Jersey-based firm RotenbergMeril will be joining the firm. The addition of this firm will grow Marcum’s market share across multiple markets. This includes Broker-Dealers, ERISA Benefit Plans, Private Funds, Public Companies, and Registered Investment Advisors (RIA).

 Audit Firm Acquistion Score Card - Top SPAC Auditor Market share for Marcum

The biggest addition to Marcum’s market share will be in the broker-dealer space. Auditing seven broker-dealers, RotenbergMeril audited 0.2% of the market last year. This will be added to Marcum’s preexisting 1.0% market share, in terms of the number of clients.

However, despite Marcum’s relatively small slice of the broker-dealer market by number of clients, the clients audited were large. In terms of the number of clients, Marcum ranks as the 25th audit firm, out of 348 total firms. However, Marcum ranks significantly higher in terms of net capital audited, auditing a total of $121 million in net capital for broker-dealers in 2020.

In the highly competitive public company market, RotenbergMeril held 0.1% market share in 2021, auditing nine companies. Marcum will add this to their existing 4.9% market share among these entities. Worth noting, RotenbergMeril has waded into the SPAC audit market and will be bringing those clients to a firm with SPAC audit expertise.

Additionally, another area where Marcum will grow is the private fund space. In 2021, in terms of the number of private funds audited, Marcum ranked at number 20, with 281 funds. The addition of RotenbergMeril’s 34 funds would boost Marcum’s market share, potentially jumping up multiple spots in the ranking.

WithumSmith + Brown and Martini Partners

Also on February 1, 2022, Withum announced the firm would join with California-based firm Martini Partners (formerly Martini Akpovi Partners). The addition of this firm will grow Withum’s market share in two markets.

Audit Firm Acquistion Score Card - Top SPAC Auditor Market share for Withum

First, is the ERISA benefit plan market. In this huge market, Withum audits over 700 ERISA benefit plans, amounting to just under 0.8% of the total market. Before being acquired, Martini Partners audited 24 benefit plans, totaling a small slice of the market.

Second, Withum’s market share in the RIA market will also grow through the acquisition of Martini Partners. In this diverse market, as of 2020, Withum conducted 63 audits, compared to seven audits conducted by Martini Partners. This amounts to 0.5% and 0.1% of the total market, respectively.

The growth in the RIA market is interesting due to the specialization of those audits. Compared to a typical auditor market share analysis, the RIA population displays significantly more diversity. This diversity indicates that the firms conducting these audits possess industry knowledge and resources that RIAs recognize and seek out when obtaining an external auditor.  

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