$28.7 billion. That’s the amount of money that’s been poured into CPA firms in the last six years per this amazing CPA Trendlines research. To put this number into perspective, it’s more than Deloitte’s 2010 revenue of $26.57 billion and only about $10 billion shy of KPMG’s 2024 global revenue of $38.4 billion.
In this post, CPA Trendlines lists the major deals — more than 53 transactions from 2020 to now, 24 of those happening last year alone — and tells us firms are getting valuations of up to 15 times EBITDA so no wonder they’re making these deals left and right.
To date, private equity has a capital foothold in 10 of the top 30 accounting firms in the US and is projected to make that figure more than half by the end of this year.
Check out the rest of the details here.
It’s an investment. It is designed to make money and not be paid out in salaries as general revenues are from the Firms. It is also an opportunity to raise money to pay partner retirements and to distribute funds to existing partners – those who aren’t shown the door. Employees should expect the squeeze so expect considerable cuts in adminstrative personnel, the increased use of India personnel (who really needs more CPAs?), more automation and control of partners/employees. Employees your life will change. Recent graduates be thankful for getting a job. This is the future.
Look at https://strippedforpartsfilm.com/. This happened with newspapers. The same situation seems to be happening here. First, the hedge funds and private equity came into newspaper companies. In addition, the newspaper companies were trying to battle the start of internet advertising. CPA firms are now battling AI. One of the only differences is that unlike newspaper companies, CPA firms typically don’t have large real estate holdings. Why aren’t more people talking about this?
Be prepare for these firms to drop in service quality and tons of audits in the near future. ANYTHING PE touches turns to trash.