Hellman & Friedman, Valeas Weigh $1 Billion Dividend Recap for Baker Tilly

Private equity firms Hellman & Friedman and Valeas Capital Partners are considering a dividend recapitalization of up to $1 billion from their portfolio company, accounting and advisory firm Baker Tilly, according to a report from Bloomberg citing people familiar with the matter.

Potential Record-Setting Deal

The proposed transaction, if successful, would mark the largest dividend deal in the market this year, based on data compiled by Bloomberg. The private equity sponsors are reportedly looking to execute the payout as part of a broader refinancing package they are raising in the leveraged loan market.

A dividend recapitalization is a financial strategy often used by private equity firms to realize a return on their investment without selling the company. It involves the portfolio company taking on new debt and using the proceeds to pay a special dividend to its equity owners.

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Background of the Investment

Hellman & Friedman and Valeas Capital Partners acquired Baker Tilly in a transaction that closed in 2024. Baker Tilly is a major accounting and advisory firm, and the move to load it with additional debt to fund a shareholder payout is a common, albeit aggressive, private equity tactic to generate returns.

The discussions are ongoing, and the final size and structure of the deal could change. The success of the refinancing will depend on investor appetite in the leveraged loan market.