CPA Firm M&A

The CPA Firm Partner Ponzi Scheme is Dead

For years, young CPAs aimed to make partner level in CPA firms. Traditionally, younger partners would “buy out” retiring partners through a retirement package, often earmarking up to 20% of annual revenue for these buy-outs. This model is unsustainable and unattractive to today’s talent. As more partners retire and fewer CPAs enter the profession, a large liability is created on a smaller group..

The profession and industry are in the middle of the greatest disruption we have ever encountered.

Exit Strategy: Founders and partners need new ways to exit their equity positions due to a shrinking pool of options.
Talent Acquisition: The traditional model doesn’t allow for ownership at different levels and disciplines. The new generation seeks a different equity model and won’t wait for partners to retire.
Operational Expertise: According to the U.S. Chamber of Commerce, small business owners are working more hours than ever before.
Burnout: A survey found that 42% of small-business owners struggled with burnout in the past month, with 72% feeling burned out from the pandemic’s impact.
Sell Side Representation: Most CPA Firm M&A transactions are represented by a single agent. Are you receiving independent, unbiased advice from a professional with multiple transaction experience?

“20% of CPA firms will be private equity sponsored” - Daniel Hood, Accounting Today

That number is likely to increase quickly in a short amount of time, especially as private equity firms target CPA firms from $10 to $50 million in size.

The stakes are now greater than they have ever been

Having an advocate and advisor that can represent and advise you independently is crucial. If you are contemplating a transaction, it is imperative that you are prepared and understand what is about to happen and what your options are in the market.

In November of 2018, we merged our firm, MiddletonRaines & Zapata LLP, into Baker Tilly and then in May of 2024, Baker Tilly entered into a PE transaction. I have experienced first-hand everything you are about to encounter. While these were all great experiences that I would do again, there are many things I simply wish I had known.

Defining goals: Establishing the firm’s expectations and goals for a transaction. What is your expectation and the result you want to achieve?
Targeting the market: Identifying the market and beginning the search for a target firm that you would want to be a part of.
Reviewing candidates: Evaluating candidates and evaluating their offers
Negotiating: Negotiating and closing the deal
Planning for post-merger: Planning for cultural integration, operations, and post-merger communications
Developing an M&A strategy: Developing a strategy for merging or acquiring a firm
Structuring the deal: Structuring the M&A agreement and supplementary agreements
Developing presentations: Creating presentations and collateral materials to sell the benefits of merging with the firm
Providing post-merger transitionary advisory services: Providing advisory services for the transition after the merger

Our Approach

We believe in a personalized approach, working closely with you to understand your unique needs and challenges. Our team of experienced advisors brings a wealth of knowledge and expertise to provide actionable insights and practical solutions.

Why Choose Us?

Unrivaled Experience & Expertise – Leverage our deep experience in CPA Firm M&A transactions and operations.
Customized Solutions – We take the time to understand your firm and your needs to deliver actionable, personalized advice.
Proactive Guidance – Stay ahead of challenges with the benefit of our experience in this type of transaction.