Jeremy Dubow: Raising the Bar for Talent | Big 4 Transparency
Why equity is the new standard for talent retention.
Big 4 Transparency
By Dominic Piscopo, CPA
For CPA Trendlines
MERGERS & ACQUISITIONS
Twelve Great Reasons to Merge In a Smaller Accounting Firm
Obtain a niche, acquire talent and more.
By Marc Rosenberg
The Rosenberg Practice Management Library
Merging Up? Settle These Twenty Items
The smaller firm gets a say, so decide what you want.
By Marc Rosenberg
The Rosenberg Practice Management Library
When a small firm considers merging upward, they listen to the terms offered by the larger firm and decide whether they can accept them. Through a combination of face-to-face meetings, negotiation sessions, telephone calls and review of materials, the seller should be comfortable with each of the following:
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1. Hopefully, you have identified the problems and the goals you have for the merger (retirement, access to staff, technical expertise, management capabilities, etc.). Do you see each of these problems and goals actually being addressed and resolved with the merger?
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Poe: What P.E. Really Wants from Firms | The Disruptors
Beyond revenue and margins, buyers are scrutinizing teams, culture, and operational health.
This is a preview. The complete 1-hour video episode, with commentary and transcript, is first available exclusively to PRO Members | Go PRO here
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The Disruptors
With Liz Farr
Brannon Poe, founder of Poe Group Advisors, says the key to a successful firm transaction is fit.
“I think having a good deal is really about having a good fit,” he says. Besides technical skills, “you have to have management styles that mesh well, you have to have client service philosophies that are aligned,” he explains.
MORE STREAMING:MORE STREAMING: Oliver: Build a Biz that Runs Without You | Daiber: Use Succession as a Growth Strategy | Cannon: Busy Season is Self-Inflicted | Carroll: When One Person Can Break the Firm | Rampe: Build a Roadmap Even When the Road’s Not There | Chang: Killing SALY, One Agent at a Time | Vanover: 5-Star Firms Don’t Bill by the Hour | Kless: Profit Is a Result. Flourishing Is the Purpose | Whitman: Build Culture on ‘Progress,’ Not Change | Shein: No PE? No M&A? No Problem | Hood and Weber: Time to RISE | Proctor: Turn Dumb Ideas into Brilliant Solutions | Carter-Gray: How 1 Poor Review Strengthened the Firm | Hartman: Upwork to “40 Under 40” in 3 Years |
For sellers, choosing the right buyer matters as much as the price. “I find that the sellers in particular, who keep their focus on fit and choose the right buyer, usually are the happiest with their exit.”
The last few years have created favorable conditions for accounting firm sales, but not for everyone.
How Private Equity Created $200 Billion in New Riches for CPAs
The math is simple, even if the implications are not.
By CPA Trendlines
For decades, the value of a CPA firm was constrained by one simple fact: partners had to buy each other out with their own money. That reality imposed discipline, but it also capped valuation. Firms were priced to be affordable, not aspirational.
That changed when private equity arrived.
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Over the past five years, private equity funding has fundamentally altered how CPA firms are valued — not by changing what firms do, but by changing how the market prices scale, recurring revenue and growth potential. The result has been a sharp, uneven reset in firm values, with some practices worth 2 to 4 times what similar firms would have commanded just a few years earlier.
Before private equity entered the market, the top 500 CPA firms, which generate roughly $146 billion in annual net revenue, would have been valued at roughly $170 billion using traditional pricing norms. Applying today’s private-equity-driven revenue multiples implies a total enterprise value of more than $400 billion — a valuation reset of more than $200 billion without any change in underlying revenue. Even the smallest firms may rise with the tide. The 500th largest firm runs about $6 million a year.