By Oliver Bogner — Managing Partner, The Advisory Investment Bank
The accounting world is changing faster than at any point in its history.
More mergers.
More unsolicited offers.
More succession-driven transitions.
And, for the first time ever, widespread private equity ownership.
Here’s the headline:
There are now 48 active private-equity-backed platforms buying CPA and accounting firms.
And 30% of the Top 75 U.S. accounting firms are now backed by private equity.
Five years ago, this number was almost zero.
Today, it’s reshaping everything — valuations, partner compensation models, ownership structures, talent strategy, and the competitive landscape.
In this deep-dive, I’ll explain exactly what’s happening, why it’s happening, and what it means for independent CPA firm owners.
Why Private Equity Is Flooding Into Accounting
Accounting has long been an attractive but slow-moving industry. That stability is exactly what private equity wants.
The primary reasons PE buyers are aggressively rolling up CPA firms include:
1. Predictable, recurring revenue
Audit engagements, recurring tax, CAS subscriptions, fractional CFO — this is subscription-like cash flow.
2. High retention & sticky clients
Clients rarely switch accountants. Multi-year engagements increase valuation.
3. Professional services margins
Properly staffed firms with clean workflow systems are highly profitable.
4. Fragmentation
Thousands of small firms with aging partners and succession issues — ideal rollup conditions.
5. Talent shortages
PE firms believe they can scale talent through shared recruiting, offshore labor, and training infrastructure.
This combination is irresistible to investors.
What Buyers Value Most in CPA Firms
Buyers focus on risk reduction, scalability, and revenue quality.
The primary valuation drivers include:
1. Service-line mix
CAS, advisory, and industry-specific audit drive higher multiples than pure tax.
2. Contracted recurring revenue
Multi-year agreements reduce churn risk.
3. Technology & efficiency
Cloud-native firms are valued higher.
4. Client concentration
No single client should be more than 10–15%.
5. Leadership depth
Buyers want firms that run without the founding partners.
6. Talent pipeline
The #1 risk factor buyers cite in accounting M&A:
“Who is actually doing the work?”
What CPA Firms Are Worth Today (Real Market Multiples)
The valuation landscape has changed dramatically in the past 24 months.
Small Firms (<$1M EBITDA)
4× – 6×
Mid-Size Firms ($1M–$3M EBITDA)
6× – 8×
Established Firms ($3M–$10M EBITDA)
8× – 10×
Platform-Level ($10M+ EBITDA)
10× – 14×+
But with 48 PE platforms aggressively bidding, competitive tension can move deals significantly past these averages.
How Accounting Rollups Work
Rollups follow a consistent pattern:
Phase 1 — Platform Acquisition
A $10M+ EBITDA firm is acquired to serve as the anchor.
Phase 2 — Add-Ons
Additional firms are acquired to expand geography, talent, service lines, and niche expertise.
Phase 3 — Integration
Platforms typically consolidate:
- HR
- recruiting
- marketing
- billing
- tech stack
- training
- offshore labor
Phase 4 — Secondary Exit
After 4–7 years, the platform sells again.
Partners with rollover equity often earn more from the second exit than the first.
The Biggest Mistakes CPA Firm Owners Make
Selling directly without process
Accepting a single offer eliminates competition and depresses valuation.
Ignoring structure
Earnouts, rollover equity, and comp restructuring matter more than the headline number.
Partner-dependent revenue
If clients rely solely on the founder, buyers discount heavily.
Weak tech stack
Old systems = expensive integration.
Succession ambiguity
PE wants clear leadership continuity.
What CPA Firms Should Do Now
If you’re considering selling in the next 1–5 years, here’s the playbook:
- Grow CAS & advisory
- Develop a second-layer of leadership
- Modernize your technology
- Document processes
- Fix client concentration
- Understand your valuation early
Planning creates value.
Waiting destroys it.
Final Thoughts
The accounting industry is changing faster than at any point in the last 50 years.
With 48 private-equity-backed platforms and 30% of the Top 75 firms already PE-owned, the consolidation wave is here — and accelerating.
Independent CPA firm owners who educate themselves now will be the ones who achieve the strongest, most strategic exits.
If you want a confidential valuation, a rollup landscape overview, or guidance on whether to sell now or wait, my team and I are here.
— Oliver Bogner
Managing Partner, The Advisory Investment Bank
