Selling your accounting or CPA firm to private equity

Where private equity stands in accounting and CPA firms (2026)

Private equity has moved into accounting faster than almost any other professional service. Sponsors were a reported 49 percent of United States accounting M&A in the twelve months to March 2026, up from about 45 percent in 2025, so for a mid-sized firm the likely buyer is now a private-equity-backed platform rather than another local firm. Reported sponsor-backed names include Grant Thornton Advisors, backed by New Mountain, Crowe, backed by KKR, Baker Tilly, backed by Hellman & Friedman and Valeas, CohnReznick, backed by Apax, EisnerAmper, backed by TowerBrook, and Citrin Cooperman, backed by Blackstone. Naming these firms describes the market; it is not a recommendation of any of them.

For an owner, this means the person across the table has closed many deals while you are probably doing your first and only one. The demand is real, driven by staffing shortages, partner succession gaps, and the pull toward higher-margin advisory work. But accounting deals carry a wrinkle no trade or MSP deal has: a licensing rule that forces the transaction into a two-part structure, and a tax rule that closes off the single largest break other sellers can use. The rest of this page is about both, along with what drives your price, how the deal is put together, what you keep after tax, and what changes afterward.

What is my accounting firm worth?

Value starts from earnings, adjusted for partner compensation and one-time costs, and a buyer applies a multiple. Here the honest answer is that the reported data does not split accounting firm valuations into clean add-on and platform bands the way the trades and MSP numbers do. Because of that, this page will not hand you a multiple range, and you should be wary of any single number presented as a market rate. What is quoted to you will depend heavily on the shape of your firm.

The factors that move the number are clearer than the number itself.

• Revenue mix, above all the share that is recurring advisory and tax work rather than lower-margin, commoditized compliance. Advisory revenue carries the higher value.
• Partner and staff retention, because a firm that loses its people after closing loses its value. Buyers price in the risk that partners walk.
• Client stickiness and tenure, since long-tenured clients on recurring engagements are worth more than transactional ones.
• Margins and the depth of the bench below the founding partners, which shows the firm can run without any one person.
• Clean books, meaning reviewed financials, clear engagement records, and separated personal expenses.

The valuation page covers how earnings are adjusted and how the working capital peg works, and the calculator turns a headline number into an after-tax figure.

How the deal is usually structured

Accounting deals begin from a licensing constraint. State rules require that a firm performing attest work, such as audits and reviews, be owned by licensed CPAs, and a private equity fund is not a licensed CPA. The answer is the Alternative Practice Structure. Your firm is split into two entities. The licensed attest firm stays owned by CPAs and keeps doing the audit and attest work. A separate non-attest company holds the tax, advisory, and back-office business, and it is this company that takes the outside capital. Service agreements connect the two. If you have read about the management-company model used in other regulated fields, where a licensed practice and a capital-holding company are kept legally separate, this is the same idea applied to accounting.

On top of that structure, the money terms look like other services deals. A typical deal pays around 60 to 70 percent in cash at close, takes a rollover stake in the non-attest company rather than cash, and holds 5 to 10 percent in escrow for a year or more against problems found after closing. A working capital peg requires you to leave a set level of receivables and work in progress in the business. Retention terms and, sometimes, earnouts tied to keeping partners and clients are more common here than in the trades, because so much of a firm's value can walk out the door. The deal terms glossary defines each term, and rollover equity covers the piece that stays at risk.

How you will be taxed

Most of your price is goodwill, taxed as long-term capital gain at 20 percent federal plus your state's rate. An accounting firm carries little depreciated equipment, so the depreciation recapture that hits trades sellers is a small issue for you. That makes the purchase price allocation between goodwill and the non-compete the main tax battleground. A covenant not to compete is ordinary income to you at up to 37 percent, and consulting or transition pay is ordinary income plus payroll tax. The buyer is often indifferent to how much of the price is called a non-compete while it costs you real money, so the allocation deserves close attention. The full mechanics are on the how a sale is taxed page.

Now the honest part, and it is not close. QSBS is not available to you. Section 1202 names accounting as an excluded field, so stock in an accounting firm is not Qualified Small Business Stock no matter how the firm is organized or taxed. This is not a fact-specific gray area like insurance or an MSP; it is a flat exclusion in the statute. Do not let a broker, a buyer, or an optimistic advisor build any part of your plan around a QSBS exclusion, because it will not survive review. Your real tax levers are the allocation, the deal structure, installment treatment where part of the price is deferred, and the after-sale plan, all of which matter and none of which depend on QSBS. The QSBS page explains the exclusion in full.

What changes after you sell

After closing, you hold a cash check and you are no longer an owner of your firm. Most platforms want the partners to keep working for several years, but the role changes. Compensation shifts from partner draws to a mix of salary and rollover equity. Decisions on technology, staffing, pricing, and which services the firm offers move to the platform. The firm's systems standardize onto the platform's stack, and younger partners are often asked to sign new long-term commitments. For a founding partner who built the firm and set its culture, becoming an operator inside a larger organization is usually a harder adjustment than the change in pay.

Your income changes too. Partner distributions stop, replaced by a platform salary that may be smaller, and by whatever the rollover pays someday. The rollover is a minority stake in a private, leveraged company you no longer control, and it may be worth more at the next sale or nothing at all. Plan your household around the cash you kept and treat any rollover payout as a bonus. The after-sale plan and managing rollover equity pages cover the money side.

Who should not sell right now

Selling to a platform is not right for every firm, and an offer can make the choice feel already decided.

• If your revenue is mostly low-margin compliance work rather than recurring advisory and tax, building the advisory side first can raise both your value and the cash portion of your deal.
• If the firm depends on one or two rainmaking partners and has no succession bench, buyers will hold back a large share in retention terms, and building depth first can be worth more than the offer in front of you.
• If your partner group is not aligned on selling, a deal that forces long commitments on partners who did not want one can fracture the firm after closing.
• If you cannot picture yourself working as an operator inside a larger organization for several years, the cash may not be worth the change in your working life.

What to do next

1. Get your partner group aligned first

   Before any buyer conversation, make sure the partners agree on whether to sell and on what commitments each is willing to make, because a divided partnership is the fastest way for a deal to damage the firm.

2. Strengthen the advisory book and the bench

   Shifting revenue toward recurring advisory and tax work, and building depth below the founding partners, are the changes that raise value most. Alongside them, get reviewed financials and separated personal expenses in order.

3. Set QSBS aside and plan the real levers

   Accounting is excluded, so do not spend energy on QSBS. Focus your CPA and counsel on the purchase price allocation, the Alternative Practice Structure, and any installment treatment. See how a sale is taxed.

4. Plan the money before the check lands

   Decide how the cash will replace your income and how you will treat the rollover, using the after-sale plan. When you want a second opinion, the contact page explains how a first conversation works, including when we will tell you that you do not need us.