Private Equity, Consolidation & What CPA Firm Partners Need to Know
In January 2020, private equity had virtually no presence inside the upper tier of the US accounting profession. Partnership structures had governed the industry for over a century, and the conventional wisdom — reinforced by auditor independence rules and professional culture — held that CPA firms were structurally off-limits to institutional capital. That consensus evaporated between 2021 and 2026. By March 2026, approximately 18 of the top 25 US accounting firms carried PE backing in some form, representing a structural reordering of an industry that generates more than $130 billion in annual revenue in the United States alone.
The speed of this transformation is without precedent in the professional services sector. Prior consolidation waves in adjacent verticals — wealth management, dental, veterinary care, staffing — each unfolded over eight to fifteen years. Accounting moved faster, in part because the structural problem was more acute. Decades of Baby Boomer partner formation had created an enormous pool of trapped equity: senior partners approaching retirement with illiquid ownership stakes and no institutional exit mechanism beyond the traditional internal buy-sell arrangement. Private equity did not simply enter the accounting market — it solved a problem the profession had not solved for itself.
The capital thesis was also compelling on its own terms. Accounting firms exhibit many of the characteristics most prized by PE investors: audit and tax compliance mandates create recurring, non-discretionary revenue; switching costs are high given the depth of institutional knowledge embedded in long-standing client relationships; the mid-market is highly fragmented, with the top 10 firms controlling less than 30% of mid-market revenue and presenting an obvious roll-up runway; and EBITDA margins at well-run firms routinely approach or exceed 30%, well above the professional services average. The combination of predictable cash flows and a fragmented acquisition landscape is precisely the setup PE playbooks are designed to exploit.
The market is now entering its second phase. PE-to-PE transfers — deals in which a financial sponsor sells its accounting platform to another, larger financial sponsor — are validating exit liquidity at scale and attracting a new cohort of institutional buyers. Blackstone's acquisition of Citrin Cooperman from New Mountain Capital in January 2025 and Goldman Sachs Alternatives' acquisition of Schellman from Lightyear Capital in March 2026 are not anomalies. They are the proof points that make pension funds, sovereign wealth vehicles, and multi-hundred-billion-dollar alternative asset managers comfortable entering the sector. The buyer pool is deepening, not contracting.
For CPA firm partners with $10 million to $150 million in revenue, the implications are direct and time-sensitive. The valuation environment of 2024–2026 — multiples ranging from 9x to 14x EBITDA for well-positioned mid-market platforms — reflects conditions that are exceptional by historical standards and unlikely to persist indefinitely. Multiple expansion cycles in professional services typically play out over five to seven years; the current wave began in earnest in 2021. This report provides a rigorous framework for understanding the deal landscape, the valuation mechanics, the structural innovation that makes these transactions possible, and the considerations that matter most for partners evaluating their options.
The accounting industry possesses an unusual combination of attributes that, in retrospect, made PE investment nearly inevitable once the legal and structural barriers were addressed. Revenue is highly recurring: public companies are legally required to have their financials audited annually, tax compliance is non-optional for businesses of any size, and advisory relationships formed over years of client service create switching costs that are extraordinarily high relative to most professional services categories. Clients do not change CPA firms lightly; the embedded institutional knowledge — tax basis records, entity structures, relationships with individual client contacts — is genuinely difficult to transfer. Annual client retention rates of 90–95% are common among well-run regional and national firms.
The market structure amplified the appeal. Despite the concentration visible at the very top — the Big Four (Deloitte, PwC, EY, KPMG) dominate audit work for large public companies — the mid-market is extensively fragmented. Thousands of independent regional and local firms serve privately held businesses, family offices, real estate operators, government entities, and nonprofit organizations, with no single player holding a dominant national position below the Big Four tier. The top 10 firms outside the Big Four collectively represent less than 30% of mid-market revenue. For PE sponsors accustomed to building scale through acquisition, this is a greenfield environment.
Against this backdrop, the partner demographics problem became the catalyst. The CPA profession grew explosively in the 1970s and 1980s, and the partners formed in that era are now in their late 60s and 70s. Traditional partnership structures offered only one exit path: selling equity back to incoming partners at formulaic values that rarely reflected market rates. A partner who had spent 35 years building a practice worth $20–30 million in enterprise value might realize $2–4 million through an internal buy-sell — a fraction of the economic reality. PE capital offered a genuine solution. Founders could monetize at market rates, reinvest a portion in the platform going forward, and participate in the next exit event. The liquidity problem that the profession had not solved for itself was, essentially, solved from outside.
Historically, PE had avoided professional services not out of lack of interest but because of structural constraints. Independence rules administered by the SEC, the PCAOB, and state CPA societies prevented direct PE ownership of attest functions — the audit, review, and compilation work that constitutes the legally regulated core of public accounting. But the development of the Alternative Practice Structure (APS) — described in detail in Section 5 — created a workable architecture for separating the attest and non-attest components of accounting firms, allowing PE capital to flow into the advisory entity while attest partners retained independent control of audit-related decisions. Once that structural innovation was validated by regulators and the profession's own governing bodies, the investor thesis became executable.
The timeline of PE entry into accounting can be understood in five discrete phases, each building on the precedents established by the one before it.
The First Movers. Four landmark transactions in a single calendar year established the template. TowerBrook Capital Partners invested in EisnerAmper (July), a New York–based firm with particular strength in financial services, hedge fund administration, and real estate. Parthenon Capital Partners backed Cherry Bekaert (October), a Southeast/Mid-Atlantic firm that would become one of the most aggressive bolt-on acquirors over the next three years. Lightyear Capital invested in Schellman (September), a specialist in cybersecurity attestation and SOC reporting. New Mountain Capital backed Citrin Cooperman (October), a top-20 national firm with a heavy New York metropolitan concentration. These four deals were not random — each sponsor had a clear thesis, a differentiated platform, and the willingness to absorb the complexity of the APS structure. They proved that the model worked.
Rapid Acceleration. The 2021 deals attracted attention across the PE industry, and 2022 brought a surge of new entrants. Summit Partners and Charlesbank Capital Partners both took positions in Aprio, a fast-growing Atlanta-based firm with a technology-industry client base. HGGC acquired Eide Bailly, a large Midwest/Mountain West regional. Broad Sky Partners invested in Smith+Howard, a specialized Atlanta boutique. The year also witnessed the merger of BKD and DHG to form Forvis, a strategic combination that vaulted the new entity into the top 10 of US accounting firms and signaled that scale through merger was a viable alternative to PE capital — or a complement to it. By year-end 2022, PE involvement in accounting had moved from novelty to established category.
Platform Building. In 2023, the emphasis shifted from initial investments to platform construction. Warburg Pincus backed Moss Adams, one of the largest West Coast–based accounting firms, signaling the geographic expansion of PE interest beyond the Southeast and Northeast. Alpine Investors launched the Ascend platform — a confederation model designed to aggregate regional firms while preserving brand and operational independence. BDO arranged a significant ESOP financing through Apollo Global Management, demonstrating that partnership-controlled firms could access institutional capital without surrendering governance. Cherry Bekaert completed multiple bolt-on acquisitions, providing early evidence of the consolidation economics PE sponsors had underwritten. CBIZ acquired Marks Paneth, foreshadowing its much larger move in 2024.
Peak Velocity. 2024 was the most active year in the wave, with PE reaching into the very top tier of the profession. New Mountain Capital invested in Grant Thornton (May), the seventh-largest US accounting firm by revenue — a transaction that confirmed PE could penetrate what had previously seemed like the upper boundary of the investable market. Hellman & Friedman backed Baker Tilly (June), the ninth-largest firm. Bain Capital invested in Sikich (April), a technology-forward Midwest platform that blurred the line between accounting and ERP consulting. Centerbridge Partners and Bessemer Venture Partners jointly invested in CRI (November), a Southeast specialist in construction, government contracting, and affordable housing tax credits. Charlesbank deepened its commitment in Aprio (August). Further Global completed its investment in Armanino (October). Lovell Minnick Partners backed Cohen & Company (October), a specialist in digital assets and fund administration. Investcorp and PSP Investments partnered to invest in PKF O'Connor Davies (November). UHY completed an agreement with Summit Partners (December). And most visibly, CBIZ acquired Marcum in a $2.3 billion disclosed transaction — the largest confirmed deal in the sector's history and the clearest demonstration yet of consolidation at scale.
Second-Generation Dynamics. The defining characteristic of 2025 and early 2026 is the emergence of PE-to-PE transfers and the entry of the largest institutional asset managers. Blackstone acquired Citrin Cooperman from New Mountain Capital in January 2025 — the first major PE-to-PE flip in accounting, validating the exit liquidity thesis for early sponsors and their limited partners. Apax Partners backed CohnReznick in February 2025. Baker Tilly and Moss Adams announced a merger in April 2025, creating a combined top-10 platform backed by Hellman & Friedman. New Mountain Capital invested in Wipfli in August 2025. BDO acquired HORNE in November 2025, continuing its growth-through-merger strategy. Cobepa invested in Sax in July 2025. And in March 2026, Goldman Sachs Alternatives acquired Schellman from Lightyear Capital — the second PE-to-PE transfer in the sector in 14 months, and perhaps the clearest signal yet that the asset class has arrived.
Three factors combined in 2024 to produce the highest deal velocity the sector had seen. The first was regulatory clarity. The AICPA and state CPA societies had been grappling with the implications of PE investment since 2021, and by 2024, enough guidance had accumulated — formal statements, informal commentary, and the lived experience of early-deal firms operating under APS structures — that sponsors and their legal counsel could underwrite transactions with meaningfully greater confidence. The attest independence question, while still not fully resolved in every jurisdiction, had workable answers in the major deal markets.
The second factor was competitive pressure among PE sponsors themselves. By 2023, it was evident to the broader PE community that accounting was producing strong early returns — both in terms of portfolio company growth and in the implied valuation trajectory visible in secondary transactions. Sponsors who had not yet established an accounting platform felt the urgency of doing so before the most attractive independent firms were gone. This competitive dynamic among buyers pushed deal timelines and valuations upward simultaneously, creating the multiple expansion that is the defining feature of 2024's deal economics.
The third factor was the demonstration effect at scale. The early transactions had involved firms in the $100–400 million revenue range. New Mountain's investment in Grant Thornton and H&F's investment in Baker Tilly — both firms with revenues approaching or exceeding $1 billion — showed that the APS structure and the PE economic model were viable at the very top of the profession. Once those ceiling-breaking transactions were completed, the range of firms that felt compelled to consider their options expanded considerably. The question for mid-market firm partners was no longer whether PE investment was legitimate; it was whether their firm would be a platform, a bolt-on, or a bystander.
The M&A Signal deal tracker covers 39 discrete transactions in the US accounting sector from January 2021 through March 2026 — a universe that includes platform PE investments, strategic bolt-on acquisitions by PE-backed acquirors, mergers of equals, institutional debt and ESOP financings, and secondary PE-to-PE transfers. The tracker does not include informal succession arrangements, non-institutional acquisitions by public companies below the materiality threshold, or international transactions not directly involving US accounting platforms. The 39 transactions represent, to M&A Signal's knowledge, the most comprehensive public-source deal database for this sector during the period.
Total estimated deal value across the tracked universe exceeds $40 billion when accounting for both disclosed transactions (including the $2.3 billion CBIZ/Marcum deal) and estimated enterprise values for non-disclosed transactions based on publicly available revenue data and market-standard EBITDA multiples. The concentration of activity in 2024 is striking: roughly 40% of tracked transactions and an estimated 50% of aggregate deal value occurred in that single calendar year, reflecting the peak-velocity dynamics described in Section 1. Activity in 2025 and early 2026 shows no sign of abating, though the composition of transactions has shifted toward larger, more complex deals including the PE-to-PE category.
| Deal Type | Count | % of Total | Notes |
|---|---|---|---|
| PE Recapitalization | 22 | 56% | Platform investments in independent CPA firms |
| Strategic Bolt-on | 12 | 31% | PE-backed platforms acquiring regional firms |
| Merger of Equals | 3 | 8% | Forvis (BKD+DHG), Forvis Mazars, Baker Tilly+Moss Adams |
| Debt / ESOP Financing | 1 | 3% | BDO / Apollo ESOP ($1.3B) |
| PE-to-PE Transfer | 2 | 5% | Citrin Cooperman (New Mountain → Blackstone), Schellman (Lightyear → Goldman Sachs) |
Deal activity has been geographically concentrated in a handful of markets that reflect both where large independent accounting firms are headquartered and where PE networks are densest. The New York metropolitan area has the highest concentration of activity, driven by EisnerAmper, Citrin Cooperman, PKF O'Connor Davies, Cohen & Company, and CohnReznick — all firms with significant New York presences and client bases heavily weighted toward financial services, real estate, and private equity fund work itself. The Southeast — particularly Atlanta, Charlotte, and Roanoke — is the second most active region, anchored by Cherry Bekaert, Aprio, and Smith+Howard, all of which serve fast-growing Sunbelt business markets with strong technology, healthcare, and real estate components.
The Midwest rounds out the top three geographic clusters, with Eide Bailly (headquartered in Fargo with major offices in Chicago and Minneapolis), Wipfli (Milwaukee), Sikich (Naperville/Chicago), and UHY (Farmington Hills, Michigan) all receiving institutional investment during the period. The West Coast, historically underrepresented in PE accounting activity relative to its market size, saw significant investment with Warburg Pincus's entry into Moss Adams (Portland/Seattle/San Francisco). National and multi-regional platforms including Grant Thornton, Baker Tilly, and Forvis defy simple geographic classification — these firms operate across dozens of markets and are best understood as national infrastructure plays rather than regional concentrations. Across deal types, the geographic picture confirms that PE interest in accounting has become truly national rather than a coastal phenomenon.
| Firm | Acquiror | Year | Est. Deal Value |
|---|---|---|---|
| CBIZ / Marcum | CBIZ (Public) | 2024 | $2.3B (disclosed) |
| Grant Thornton | New Mountain Capital | 2024 | ~$6.5–$9.0B est. |
| Baker Tilly | Hellman & Friedman | 2024 | ~$4.5–$7.0B est. |
| BKD + DHG (Forvis) | Merger of Equals | 2022 | ~$3.8–$6.1B est. |
| Forvis + Mazars USA | Merger of Equals | 2024 | ~$2.2–$3.5B est. |
| CohnReznick | Apax Partners | 2025 | ~$2.0–$3.5B est. |
| Citrin Cooperman | Blackstone (from New Mountain) | 2025 | ~$2.0B est. |
| Baker Tilly + Moss Adams | Merger (H&F backed) | 2025 | ~$3.1B combined est. |
Note: Estimated enterprise values are M&A Signal analysis based on publicly disclosed revenue and market-standard EBITDA multiples. Non-disclosed transaction values are estimates only. See Methodology section.
The buyer universe in accounting M&A is more diverse than a simple "PE is buying accounting firms" narrative suggests. The 14 most active acquirors in the sector span four distinct buyer types, each with a different strategic rationale and operational approach. Public companies — principally CBIZ, which has used its access to equity markets and balance sheet to fund acquisitions that purely PE-backed competitors cannot match — occupy one end of the spectrum. PE-backed accounting platforms, in which the PE sponsor provides capital and strategic support while the accounting firm executes acquisitions of smaller regional firms, represent the majority of activity. Specialist PE funds with thesis-driven accounting exposures (Lovell Minnick in financial services, Parthenon in services businesses, Bain Capital with its ERP-plus-accounting thesis at Sikich) bring sector expertise alongside capital. And at the upper end of the asset-management scale, global alternative asset managers — Blackstone, Goldman Sachs Alternatives, Apax Partners — are deploying their multi-hundred-billion-dollar platforms into accounting for the first time.
The convergence of these four buyer types has created unusual competitive dynamics. Public company CBIZ can move quickly and offer integration certainty that PE sponsors cannot. PE-backed platforms can offer target firm partners equity participation in a growing portfolio and the possibility of a second liquidity event. Specialist PE funds can articulate industry-specific value creation theses that generalist sponsors cannot match. And the mega-managers bring brand prestige and fund permanence that smaller sponsors are structurally unable to offer. For a CPA firm partner evaluating a sale, understanding which acquiror type fits their specific situation — geography, practice mix, culture, timeline — is as important as understanding valuation multiples.
The competitive landscape among acquirors has also pushed sponsors to differentiate on dimensions beyond capital. Some emphasize technology investment as a post-close priority; others lead with talent retention packages, geographic expansion commitments, or specialty practice development capital. As the pool of attractive independent acquisition targets has shrunk — particularly at the $50M–$200M revenue range, where PE attention has been most concentrated — deal quality and fit have become more important in closing transactions. The sponsors profiled below have each staked out distinct positions in this competitive field.
Public company with $2.5B+ in revenue post-Marcum. Full integration model with complete operational absorption. The most aggressive buyer at the top of the market, with access to public equity markets that PE sponsors lack. Client base spans middle-market companies across all industries.
Multi-platform accounting strategy with investments in Grant Thornton, Citrin Cooperman (exited to Blackstone), and Wipfli. Ecosystem approach leverages the NMC PE portfolio as a client development channel. One of the most active and sophisticated accounting PE investors.
Tier-1 global PE fund known for high-quality services businesses. Backed Baker Tilly (2024) and provided additional capital for the Baker Tilly/Moss Adams merger (2025). Track record in insurance, software, and professional services gives credibility with large firm partners.
Acquired Citrin Cooperman from New Mountain Capital in January 2025 in the first major PE-to-PE accounting transfer. Blackstone's entry signals the institutional arrival of the asset class and raises the floor for exit valuations across the sector.
Global PE fund backed CohnReznick in February 2025, building a financial services accounting thesis. CohnReznick has significant exposure to real estate, affordable housing tax credits, and financial services audit — sectors where Apax has existing portfolio relationships.
2021 investment in Cherry Bekaert anchors a Southeast/Mid-Atlantic growth strategy. Has completed 10+ bolt-on acquisitions post-close, making Cherry Bekaert one of the most active platform acquirors in the sector. Known for operational discipline in services businesses.
Invested in EisnerAmper in 2021 with a clear thesis around financial services and hedge fund accounting. New York–headquartered firm with particular strength in alternative investment fund services, making EisnerAmper a natural fit for TowerBrook's fund-of-funds LP base.
Backed Aprio (August 2024) with a growth-equity orientation suited to Aprio's high-growth, technology-industry client profile. Atlanta-based Aprio serves a disproportionate share of venture-backed technology companies and international businesses expanding into the US.
Invested in Moss Adams in 2023, establishing West Coast presence in accounting PE. Moss Adams subsequently merged with Baker Tilly in 2025, creating one of the largest PE-backed accounting platforms in the country. Warburg's investment is now part of the H&F/Baker Tilly ecosystem.
Investment in Sikich (April 2024) reflects a distinctive ERP-plus-CPA convergence thesis. Sikich provides both accounting services and Sage/Microsoft Dynamics ERP implementation, giving Bain exposure to the blurring boundary between technology consulting and professional services.
Joint investment in CRI (November 2024) — an unusual pairing of a credit-focused PE firm with a venture fund. CRI's specialties in construction accounting, government contracting, and affordable housing tax credit work make it a niche platform with defensible positioning.
Investment in UHY (December 2024) adds a Midwest multi-industry platform to the PE accounting landscape. UHY is known for its manufacturing, automotive, and industrial client base in Michigan and surrounding states — sectors underserved by the predominantly East Coast focus of earlier PE investments.
International PE firm partnered with a Canadian pension fund to invest in PKF O'Connor Davies (November 2024). The joint structure reflects the growing participation of institutional allocators in accounting PE and introduces a global capital perspective to a traditionally domestic asset class.
Launched the Ascend confederation platform — a fundamentally different model from the full-integration approach of most acquirors. Ascend now encompasses 20+ regional firms that maintain brand and operational independence while sharing capital access, a peer network, and back-office resources.
Prior to 2021, accounting firm M&A operated within a narrow and well-understood valuation band. Internal succession transactions — the dominant transaction type — were priced at formulaic multiples of revenue or partner compensation that bore little relationship to enterprise value as a financial investor would calculate it. Third-party acquisitions by larger accounting firms were typically priced at 0.5–0.8x revenue or 4–6x EBITDA. These multiples reflected the strategic value that one accounting firm derived from acquiring another — primarily client relationships and staff — discounted by the integration risk and the absence of competitive tension among buyers. There were few acquirors, and those that existed were not competing against financially motivated buyers with different return expectations.
The arrival of PE capital in 2021 changed the valuation dynamics fundamentally and immediately. PE sponsors underwrite acquisitions based on enterprise value relative to EBITDA — and their hold-period return assumptions, combined with the leverage they apply to acquisitions, support meaningfully higher entry multiples than strategic accounting firm buyers. As PE interest intensified through 2022 and 2023, and as multiple firms with PE backing began competing to acquire the same pool of independent regional firms as bolt-on targets, multiples responded predictably. By 2023, mid-market firms with $25–$100 million in revenue and strong fundamentals were clearing 9–12x EBITDA. In 2024, at peak velocity, well-positioned platform transactions at the $100M–$400M revenue range reached 12–15x EBITDA — more than double the pre-PE baseline.
The multiple expansion also reflects a genuine re-rating of accounting firms as an asset class. Investors who came to understand accounting firm economics — the revenue recurrence, the margin profiles, the switching cost dynamics — revised their views of sustainable entry multiples upward. This is not simply a case of "too much money chasing too few deals," though supply-demand imbalance has certainly played a role. It reflects a more durable recognition that accounting firms, properly structured and operated, exhibit financial characteristics more similar to software businesses than to traditional professional services firms. The recurring revenue narrative that drove software multiples in the 2018–2021 period is now being applied, with appropriate discounting, to the accounting sector.
| Firm Segment | Revenue Range | EV / Revenue | EV / EBITDA |
|---|---|---|---|
| Small CPA firms | <$10M | 0.5–0.8x | 4–6x |
| Mid-market firms | $10M–$75M | 1.0–1.5x | 8–11x |
| Large platforms | $75M–$300M | 1.5–2.5x | 11–14x |
| Top-10 PE recaps | $300M+ | 2.0–3.0x+ | 12–16x+ |
| CBIZ/Marcum (confirmed) | ~$835M (Marcum) | ~2.75x | ~10x |
The CBIZ/Marcum transaction at ~2.75x revenue illustrates that disclosed multiples for large strategic transactions can diverge from PE deal comps — CBIZ's full-integration model and public company cost of capital produce different economics than a leveraged PE buyout. Both data points are useful; neither is the universal benchmark.
Specialty practice differentiation is the single most powerful driver of premium multiples in the current market. Firms with defensible specialty positions — cybersecurity attestation and SOC reporting (as at Schellman), digital asset accounting and fund administration (Cohen & Company), government contracting and affordable housing tax credits (CRI) — consistently trade at 15–25% premiums over generalist accounting firms of equivalent revenue. This premium reflects the higher defensibility of specialist client relationships, the scarcity of qualified practitioners in niche areas, and the higher advisory billing rates achievable for genuinely specialized services. In a market where PE sponsors are competing intensely for quality platforms, a clearly differentiated specialty is among the most effective ways to generate competitive tension among buyers.
Technology integration and operational maturity is the second major premium driver. Firms that have invested in modern practice management platforms, automated workflow tools, client portal infrastructure, and cloud-based accounting software are perceived as more scalable — meaning that PE sponsors can grow revenue without proportional headcount additions. This scalability perception is worth real money: in diligence processes, operational technology investments can shift the underwritten EBITDA margin trajectory by 3–5 percentage points, translating directly into higher sustainable multiple offers. Firms operating on legacy time-and-billing systems and paper-intensive processes face an implicit discount that is rarely discussed explicitly but is always present in underwriting models.
Geographic positioning matters most for firms competing in Sunbelt markets and firms with genuinely national client bases. Sunbelt markets — Atlanta, Charlotte, Tampa, Dallas, Phoenix, Nashville — command modest geographic premiums driven by client growth rates, talent availability, and demographic tailwinds in the underlying business economy. National client relationships, regardless of office location, signal to PE buyers that the firm has the capability and brand reputation to compete outside its home market — a prerequisite for credible roll-up execution.
Revenue quality metrics are scrutinized closely in every accounting firm diligence process. Year-over-year client retention rates above 90% are expected; rates above 95% are differentiating. The composition of revenue matters too: engagements under multi-year contracts or with formal engagement letters that establish service expectations are valued more highly than informal recurring arrangements. Firms that have converted even a portion of their revenue base to subscription or retainer pricing — a trend accelerating with the growth of outsourced CFO and fractional accounting services — earn premium treatment.
Partner succession clarity is a frequently overlooked premium driver. Buyers underwrite the risk that key partners will depart post-close — an event that can destroy client retention and profitability simultaneously. Firms with clear next-generation leadership, partners in their 40s and 50s who are demonstrably positioned to continue client relationships through the PE hold period and into the next exit event, command meaningfully higher multiples than firms that are partner succession problems wearing accounting firms' clothing.
When two partners originate 60% or more of firm revenue, buyers typically apply a 20–35% discount to headline valuations. The risk is binary: these partners, despite rollover equity incentives, may depart or reduce productivity, destroying much of the value the acquiror underwrote. Sellers should expect this to be identified in diligence and should have a concrete narrative for how it is being addressed.
A single client representing more than 15% of total revenue introduces material business risk that buyers price as a discount. Even if the relationship is stable and long-standing, the concentration creates a scenario analysis in which one client departure materially impairs firm value — an outcome no PE buyer will underwrite at full multiple.
A partnership where the majority of equity holders are within five years of retirement — with no developed junior partner pipeline — is underwriting a managed wind-down, not a growth platform. Buyers will reflect this reality in their bids, either through lower multiples or through earnout structures that transfer retirement risk back to selling partners.
A generalist tax and audit practice in a competitive market, without defensible specialty positions or geographic moats, is a commodity service provider in a commoditizing market. AI-driven automation is accelerating commoditization of routine compliance work; buyers who understand this trend will apply meaningful discounts to firms whose revenue is disproportionately weighted toward commodity compliance services.
EBITDA margins below 20% — often a symptom of excess partner compensation that obscures true profitability — trigger close scrutiny in diligence. While buyers will add back non-recurring items and normalize owner compensation, sustained below-market margins indicate either structural inefficiency or a culture of distributing profits rather than investing them. Both interpretations result in lower bids or more aggressive earnout structures.
The Alternative Practice Structure — commonly called the APS — is the legal and organizational innovation that made PE investment in accounting firms possible. Without it, the regulatory framework governing auditor independence would prevent a private equity firm from taking a meaningful ownership stake in any entity that performs attest services: audit, review, and compilation engagements. Understanding the APS is not merely a legal technicality; it defines the boundaries of what is being bought and sold in every PE accounting transaction, and it has direct implications for how selling partners should structure their expectations.
The independence requirements that necessitate the APS originate in three overlapping regulatory frameworks. The SEC requires auditors of public companies to be independent of those companies, and its independence rules extend to "financial interests" — any ownership stake — held by an audit firm or its affiliates. The PCAOB maintains parallel standards for public company audits. State CPA societies, operating under the AICPA's model rules, impose their own independence requirements, including limitations on who may own a CPA firm. Taken together, these requirements make it impossible for a private equity sponsor — which typically holds financial interests in companies across many industries — to own an entity that issues audit opinions without triggering widespread independence violations across the sponsor's portfolio.
The APS resolves this problem by dividing the accounting firm into two legally distinct entities. The first — typically an LLP or professional corporation owned exclusively by licensed CPAs — retains all attest functions. The second — an advisory LLC or similar non-attest entity — houses all non-attest services: tax consulting, business advisory, transaction advisory, technology consulting, outsourced finance and accounting, and any other services that do not require CPA licensure or constitute an attestation engagement. PE capital flows into the advisory LLC; the attest LLP remains under partner ownership and control. The two entities are connected through a shared services agreement under which the attest LLP utilizes the infrastructure, staff, and resources of the advisory entity on commercial terms, and the advisory entity receives a fee for those services.
The economics of this structure are important for sellers to understand. Attest services — audit, review, and compilation — typically represent 20–35% of total firm revenue, and their EBITDA contribution, while positive, is lower than advisory services because of the regulatory compliance costs, liability exposure, and the time demands of audit work that prevent leverage ratios available in pure advisory practices. What PE is primarily acquiring is the advisory entity — the tax consulting, the business advisory, the outsourced CFO work, the transaction and due diligence services. This is where the growth is, where the margin is, and where technology investment generates the most immediate return. Sellers who think of their firm primarily as an "audit firm" may underestimate the value attributable to their advisory revenue; sellers who overweight their attest practice may be surprised to find that buyers are principally interested in what they consider secondary services.
Governance is the most practically significant implication of the APS for selling partners. PE sponsors cannot — and in legitimate transactions do not attempt to — direct audit methodology, staffing decisions on attest engagements, or professional judgments made in the context of a review or compilation. The attest LLP must retain genuine independence; partner control of audit decisions is not merely a legal formality but a condition of the firm's ability to issue audit opinions and, ultimately, of the transaction's compliance with independence rules. This has a direct bearing on the post-close partner experience: in the attest function, the day-to-day professional environment looks much like pre-close. The PE-driven changes — technology investment, marketing, business development resources, administrative consolidation — are concentrated in the advisory entity. One additional governance nuance worth noting: Blackstone's decision to keep its ownership stake in Citrin Cooperman below the 50% threshold was not a coincidence. Under AICPA independence rules, ownership above certain thresholds can trigger "financial interest" independence violations. Deal structures in the largest transactions are carefully calibrated to remain within safe harbors, and sellers should expect their advisors to pay close attention to these thresholds during negotiations.
Key implication for sellers: The attest practice you built remains under CPA partner control post-close. What is being sold is the advisory growth engine — and that is where the majority of deal value resides.
One of the most consequential choices in any accounting firm M&A process is not valuation — it is integration model. Partners who focus exclusively on the headline enterprise value and rollover equity percentage, without carefully evaluating what their post-close professional life will look like, frequently discover misalignment between their expectations and the reality of operating inside a PE-backed platform. The three integration models that have emerged from the 2021–2026 wave have meaningfully different implications for autonomy, brand identity, cultural continuity, and the ultimate financial outcome for selling partners.
In the full integration model, the acquired firm is completely absorbed into the acquiring platform — typically within 12–24 months post-close. This means rebranding under the acquiror's name, migration to shared technology systems, consolidation of HR and benefit programs, and the gradual integration of client service teams into the acquiror's industry verticals and functional practices. The local partner group transitions from running an independent firm to leading a regional office or practice group within a national platform.
This model is best suited for firms where the local brand carries limited independent value — firms whose clients chose them for their people and service quality rather than for the firm's name — and for partners who are genuinely interested in joining a large national platform, with the attendant access to broader resources, cross-referral networks, and specialist expertise. CBIZ's acquisitions uniformly follow this model; Cherry Bekaert, despite maintaining its own brand identity as a PE-backed platform, absorbs bolt-on acquisitions under the Cherry Bekaert name.
In the equity partnership model, the acquired firm preserves its brand identity while achieving economic integration with the platform. Partners receive cash proceeds at closing — typically 50–70% of total deal consideration — plus equity in the platform entity, which provides participation in the next exit event. Day-to-day operations remain largely under local partner control, particularly in client-facing activities, while back-office functions migrate to shared services over time. Technology systems are typically integrated more gradually than in a full integration model, reducing near-term disruption to client service workflows.
This model is most appropriate for firms with genuine local brand equity — firms whose clients have been with the firm through multiple partner generations and for whom the relationship with "the firm" rather than a specific partner is part of the value proposition. The equity partnership structure preserves client relationships during and after the integration process while still delivering the liquidity event that partners were seeking. EisnerAmper's 2021 deal with TowerBrook has followed this model effectively, with EisnerAmper maintaining its brand while growing substantially through bolt-on acquisitions.
The decentralized confederation model represents the furthest point on the integration spectrum from full absorption. In the Ascend model pioneered by Alpine Investors, member firms retain their brand name, their client relationships, their local market identity, and most operational decision-making authority. What Ascend provides is access to acquisition capital — enabling local partners to grow their own practices through bolt-on acquisitions they could not fund independently — plus shared back-office infrastructure, a peer network of firm leaders, and the collective purchasing leverage of a 20+-firm platform.
This model is designed for firm partners who are deeply invested in their local market identity and who value independence above financial optimization. The financial outcomes are generally lower on an enterprise value per dollar of revenue basis than in the full integration or equity partnership models, because the absence of integration synergies means the PE sponsor must underwrite returns based on organic growth and bolt-on acquisition economics alone. But for firms where the partners genuinely believe that local independence is a competitive advantage — in markets where personal relationships and community embeddedness drive client retention — the confederation model may produce better outcomes on a risk-adjusted basis.
For individual partners considering a PE transaction, the headline enterprise value is only the starting point. The structure of consideration, the terms of rollover equity, the conditions attached to earnout payments, and the legal restrictions embedded in non-compete agreements all materially affect the actual economic outcome — and in some cases, the structure of post-close professional life. Partners who engage in these processes without advisors experienced specifically in accounting firm M&A frequently leave significant value on the table or accept terms that constrain their options in ways they did not fully anticipate.
A rollover equity requirement — typically 30–50% of total deal consideration reinvested in the acquiring platform entity — is standard in PE accounting transactions and is generally not negotiable in terms of whether it exists, though the specific percentage and the valuation at which it is reinvested are deal points. Partners should understand the rollover as a meaningful second-bite-of-the-apple opportunity rather than a withholding: if the platform performs well and exits at a higher multiple, the rollover equity generates returns that can equal or exceed the initial cash proceeds. The risk, of course, is that the platform underperforms or takes longer than expected to exit, during which period the rollover equity is illiquid. Partners should carefully evaluate the PE sponsor's fund lifecycle — how much of the fund's investment period has elapsed, what is the expected hold period, and when is the next liquidity event realistically likely to occur.
Earnout provisions — typically 10–20% of total deal consideration paid over 2–3 years following close — are designed to align seller and buyer interests during the integration period and to protect the buyer against revenue attrition. Earnout metrics in accounting firm transactions most commonly include revenue retention (measured against a trailing twelve-month baseline), client satisfaction scores, and in some cases, specific cross-sell or new business metrics. The critical risk for sellers is that post-close integration decisions made by the acquiror — rebranding, technology migrations, staffing changes — can affect the metrics on which earnout payments are calculated, through no fault of the selling partners. Sellers should negotiate for earnout provisions that protect against acquiror-driven revenue disruption, and should pay close attention to the definitions of "revenue" and "client retention" in the purchase agreement.
Non-compete agreements of 3–5 years are standard in accounting firm M&A. For sellers in most US jurisdictions, these are enforceable and represent a meaningful constraint on future professional options — including the ability to start or join a competing accounting practice, to work with former clients, or to recruit former staff. Partners in California and Minnesota should note that non-competes are generally unenforceable in those states; this has material implications for deal economics in West Coast transactions, where buyers must underwrite the risk that selling partners depart with their client relationships intact. For sellers in jurisdictions where non-competes are enforceable, the length and geographic scope of the restriction should be a negotiating point — a 3-year agreement at market rates is more defensible than a 5-year agreement that effectively prevents a partner from practicing in their area of expertise.
The tax treatment of proceeds in an accounting firm PE transaction is complex and highly fact-specific, but a few principles apply broadly. The treatment of cash at closing versus rollover equity, the allocation of purchase price among firm assets (tangible assets, client relationships, goodwill), and the characterization of payments as capital gain versus ordinary income each have significant tax implications that vary by deal structure and state of domicile. Partners who are Pennsylvania, New York, or California residents face materially different state tax outcomes than partners in Texas or Florida. Sellers should engage a tax advisor with experience in partnership interest sales — ideally before LOI execution, not after — to model the after-tax proceeds under alternative deal structures.
Perhaps the most frequently underestimated dimension of an accounting firm PE transaction is the value of rollover equity participation in the next exit event. Partners who roll equity at first PE deal participate in the platform's future value creation — through bolt-on acquisitions, organic growth, and multiple expansion at the time of the next sale. The Citrin Cooperman transaction sequence illustrates the potential: partners who rolled equity at New Mountain Capital's initial investment in 2021 participated in the Blackstone acquisition in January 2025 at what is estimated to be a meaningfully higher valuation. Goldman Sachs's acquisition of Schellman from Lightyear in March 2026 similarly rewarded partners who had maintained equity through the first hold period. Understanding the PE sponsor's fund lifecycle — and their realistic view of exit timing and exit multiples — is essential to evaluating the full economic potential of a transaction.
Employment agreements, compensation structures, and governance rights post-close vary significantly across deal types and acquirors. In full integration transactions, partners typically transition to W-2 employment with defined compensation levels — often a step down from the total partner distributions they received as owners. In equity partnership models, partners may retain some form of equity compensation alongside a base salary. The transition from partnership economics to employment economics is one of the most culturally significant changes partners experience post-close, and it deserves careful attention during deal negotiations. Partners who negotiate post-close compensation structures that maintain performance-based upside — through practice group leadership bonuses, business development incentives, or platform equity grants — tend to report higher satisfaction with the outcome.
The defining characteristic of the 2026–2028 period in accounting M&A will be the normalization of PE-to-PE transfers as a primary deal type. The early sponsors who entered accounting in 2021–2022 are approaching or entering their typical hold-period exit windows of five to seven years. Their limited partners — pension funds, endowments, sovereign wealth vehicles — are expecting liquidity. The two completed PE-to-PE transfers (Citrin Cooperman and Schellman) have demonstrated that exit liquidity exists at valuations that validate the investment thesis, which in turn attracts the next generation of institutional buyers: Blackstone, Goldman Sachs Alternatives, Apollo, and the global pension and sovereign wealth allocators that have not yet built direct accounting exposures. The buyer pool for PE-backed accounting platforms is getting deeper, not shallower. This is the single most important structural development in the market for 2026–2028.
International expansion will be the second major theme. US PE-backed platforms — backed by sponsors with global networks and portfolio relationships — are increasingly exploring entry into UK, Canadian, and Australian accounting markets, each of which exhibits the same structural dynamics (fragmented mid-market, aging partner demographics, trapped equity) that characterized the US market in 2020. Forvis Mazars, as a global combination, provides a template for how US-origin accounting platforms can develop international reach. Grant Thornton, with its long-standing global network affiliation, has infrastructure that a New Mountain Capital–backed expansion strategy could leverage. Baker Tilly, now combined with Moss Adams, similarly has a global network membership that could support cross-border growth. Partners in US firms should expect acquirors to evaluate international expansion capability as an element of platform value — and should understand that acquirors with global PE networks may generate non-US client referrals that mid-market sellers have not historically been able to service.
Artificial intelligence presents accounting M&A with its most consequential and least resolved dynamic. The automation of routine compliance work — tax return preparation, audit sampling, data extraction from financial statements, regulatory filing — is advancing rapidly, and the economic implications are material. On one hand, workflow automation reduces headcount per dollar of revenue, which expands EBITDA margins and, at current multiples, directly increases enterprise value. Firms that invest aggressively in AI tooling during the 2025–2028 period may report margin improvements of 4–8 percentage points — a transformation that at a 12x EBITDA multiple translates into enormous value creation on a per-partner basis. On the other hand, the same automation that raises margins for existing firms also commoditizes the compliance work that has historically served as the entry point and anchor for client relationships. A firm that derives 70% of its revenue from tax return preparation and basic audit services is underwriting a model that AI is actively disrupting. Specialty and advisory services — transaction advisory, forensic accounting, cybersecurity attestation, outsourced CFO, business valuation — are becoming more valuable relative to compliance as AI commoditizes the commodity. Firms that have already made this mix shift are positioned advantageously; firms that have not will find that 2026–2028 valuations reflect acquiror skepticism about the durability of compliance-heavy revenue.
The regulatory environment warrants close monitoring. The AICPA is reviewing its model rules and guidance on PE ownership thresholds in the wake of the 2021–2026 wave of transactions, and there is genuine uncertainty about whether the current APS framework will survive unchanged through the end of the decade. The SEC is actively monitoring audit independence compliance at PE-backed firms, with particular attention to the question of whether PE sponsors are genuinely respecting the governance separation the APS requires or whether, in practice, PE influence is affecting audit judgments. State CPA societies vary considerably in their positions on PE involvement: some have been accommodating; others remain skeptical; a few are actively exploring additional restrictions. Sellers and sponsors should monitor this regulatory environment carefully, particularly in the period following any PCAOB enforcement actions related to PE-backed audit firms.
The window for peak-cycle transactions is real, and it is finite. Multiple expansion cycles in professional services have historically lasted five to seven years from the first institutional investment to the onset of multiple compression. The current wave began in earnest in 2021. The most favorable valuation conditions — widespread PE competition for quality platforms, 12x+ EBITDA multiples for well-positioned mid-market firms, abundant capital at relatively low cost — are likely characteristics of the 2024–2026 period. Firms that delay a process beyond 2027 may encounter a market in which the most attractive acquisition targets have already been absorbed, PE competition has diminished, and multiples have normalized toward their long-run range. This is not a prediction of market collapse; it is a recognition that professional services M&A cycles are real, that timing matters, and that partners who have spent decades building their practices deserve a considered evaluation of whether this cycle represents the right moment for the liquidity event they have earned.
The deal data underlying this report was compiled from public sources including press releases issued by acquiring firms and private equity sponsors, coverage in Accounting Today, Inside Public Accounting, Accounting Today Top 100 annual rankings, The American Lawyer, and general financial press including The Wall Street Journal, Bloomberg, and Reuters. AICPA publications and guidance documents were reviewed for regulatory context. Company websites, investor relations materials from public companies (including CBIZ), and sponsor-published portfolio company descriptions were consulted to confirm deal details.
The deal tracker covers the period from January 2021 through March 2026. Transactions confirmed by the parties via public announcement are designated as confirmed. Enterprise value estimates for non-disclosed transactions are M&A Signal analysis based on publicly available revenue data (drawn from Accounting Today Top 100 rankings and other published sources), market-standard EBITDA margin assumptions for each firm segment, and reported or inferred transaction multiples from comparable disclosed transactions during the period. These estimates carry inherent uncertainty; they are provided for analytical context and should not be treated as confirmed transaction values. The EBITDA margin assumptions used in valuation benchmarking reflect industry norms and may not capture firm-specific differences in partner compensation structure.
All content in this report represents M&A Signal editorial analysis and opinion. It does not constitute legal, tax, financial, or investment advice. Readers evaluating M&A transactions should retain qualified advisors with specific experience in accounting firm transactions.