Pulse Check: How is accounting firm pipeline trending?

searcher profile

October 19, 2024

by a searcher from University of Washington in Sacramento, CA, USA

It may be because I'm searching for an accounting firm, but has anyone else noticed an uptick in reports from various news sources (FT, Reuters, Forbes) about PE leaning into more accounting firm roll-ups?

For brokers out there, how is your deal flow for accounting firms looking? Has this driven pricing up? Is the demand sitting more with larger regional firms or smaller local shops?

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commentor profile
Reply by a professional
from Boston University in Chicago, IL, USA
I would agree with Brendan. I would recommend starting a firm and selling it down the road vs buying. There is an incredibly high demand right now for CPA firms and services. I personally believe it is much easier to define what you want your firm to look like from an operational standpoint than buying and trying to force existing operational processes/controls to adapt to what you would like to do. Any purchased firm is going to have clients that will suck up a ton of your time, especially during a transition. Just my opinion, I know many accountants that have had success with buying a firm and absorbing current operational process/procedures. Happy to connect and answer any questions.
commentor profile
Reply by a searcher
from University of Massachusetts Amherst in Sydney NSW, Australia
I have a strong interest in this sector. For me the main question is how best to differentiate from existing roll up operators, who can offer the vendor:

1. the comfort of their operational experience

2. a range of internal services and

3. a community of partner firms.

I think there's work to do in constructing a value proposition that appeals to the owner.

An avenue that is probably worth exploring is informally working with a PE firm that knows the space, setting some criteria for what the eventual exit looks like, and doing the work to build a business that meets their acquisition appetite.
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