Leonard Green set to acquire Cumming Group in major $3bn buyout

The Los Angeles-based private equity group is approaching an acquisition of Cumming Group, a consultancy firm that has provided advice on building projects in over 35 countries worldwide, from New Mountain, valuing the business at $3 billion including debt, according to the individuals.

The deal, expected to be announced in the upcoming weeks, comes during a slow period for midsized deals involving private equity groups, as persistently high-interest rates continue to hinder the primary driver of deal activity.

The timeline could still change, and discussions could still fail, the individuals cautioned. Jefferies advised New Mountain on the sale.

The first three months of the year marked the third consecutive $1 trillion quarter, with a total of $314 billion in private equity deals announced globally, according to LSEG data. However, the number of private equity-backed deals dropped 12 percent year on year to a six-year low.

Business services and consultancy firms have proven to be fertile ground for private equity groups due to their steady cash flows and dependable customer base. Last December, Warburg Pincus generated $3.3 billion from selling the engineering consultancy firm TRC to the $30 billion-listed professional services group WSP Global.

Cumming Group, which has approximately 3,000 employees worldwide, has advised on substantial infrastructure projects such as the $9 billion redevelopment of JFK airport’s terminal one.

Leonard Green, which manages $75 billion in assets, focuses on investing in service businesses across sectors as diverse as hospitality and healthcare. Earlier this year, Leonard Green acquired a majority stake in the Topgolf unit, which operates popular driving ranges, from Callaway Golf, valuing the business at $1.1 billion.

The potential sale of Cumming Group would mark New Mountain’s largest exit in several years. New Mountain had considered offloading five of its healthcare technology companies to a new investment vehicle established by former partner Matt Holt in what would have been a $30 billion deal, but these plans were canceled earlier this year.

Leonard Green and New Mountain did not immediately respond to requests for comment. Jefferies declined to comment.