Selling Your CPA Firm to Private Equity

Why private equity wants accounting firms

Three things make accounting firms attractive to investors:

1. Recurring revenue. Audits and tax returns are needed every year, in good times and bad. The Pennsylvania CPA Journal calls these “annuity revenue streams.”
2. A fragmented market. The profession is made up of many small and mid-size firms that can be combined into larger platforms.
3. Owners looking to exit. Many partners are nearing retirement, and fewer younger CPAs want to buy them out under the old model.

How fast it’s happening

• Deal count: CPA Trendlines’ tracker logged private equity deals in accounting rising from 22 in 2023 to 65 in 2024 and more than 100 in 2025, and more than 200 in total by early 2026.
• Share of the market: financial buyers made 54.8% of accounting-services M&A in 2026 to date, up from 38.9% a year earlier (Kadenwood Group).
• The biggest names are involved. In January 2025, Blackstone agreed to a significant investment in Citrin Cooperman, buying its stake from New Mountain Capital, so one private equity owner sold to another. In August 2026, KKR closed its investment in Crowe Advisory.

How a private equity deal is structured

The alternative practice structure

Investors who aren’t CPAs can’t own a firm’s audit practice. So most deals split the firm in two. Crowe’s KKR deal is a clear example:

Entity	Who owns it	What it does
Crowe LLP	Remains a licensed CPA firm	Audits, reviews and other attest services
Crowe Advisory LLC	Received KKR’s investment	Tax, advisory, consulting and other non-attest services

The two entities keep serving clients under one brand. For a smaller firm selling to a PE-backed platform, the same logic applies: your audit clients and your tax and advisory clients may end up in different legal entities.

Price, stake and fees

The Pennsylvania CPA Journal describes the typical terms for larger firms:

• Valuation: a multiple of EBITDA, mostly 5 to 15 times in recent deals. Higher recurring revenue and growth push the multiple up.
• Ownership: investors usually take a majority stake, while existing partners keep a significant minority, which keeps everyone’s incentives aligned.
• Debt: part of the price is usually borrowed.
• Transaction fees: often 2% to 2.5% of enterprise value.
• Management pool: options or equity of around 10% are often set aside for younger staff.

A worked example (from the Pennsylvania CPA Journal)

Firm revenue	$40 million
EBITDA	$8 million
Valuation at 12× EBITDA	$96 million
Investor buys	65%
Partners keep	35%
Partners receive at closing	Roughly $62 million to $70 million before their remaining stake, depending on fees and how much borrowed money is distributed

If the firm then grows EBITDA to $15 million and sells again at 15×, the partners’ retained 35% becomes the “second bite,” potentially worth more than the first.

What the buyer needs from you after closing

This is where Bain and McKinsey’s 2026 research matters to a selling partner.

Buyers are paying record prices. McKinsey reports that the median EBITDA multiple paid in buyouts reached a record 11.8 times in 2025, up from 11.3 times in 2024. In McKinsey’s words: “The more an acquirer pays at entry, the greater its need to deliver material, operational value creation.”

Cheap money is gone. Bain notes that a typical 2015 buyout borrowed about half the price at 6–7% interest. Today borrowing costs are around 8–9% and debt covers only 30–40% of the price. With prices flat and debt more expensive, Bain calculates deals now need 10–12% annual EBITDA growth to reach a 2.5 times return over five years. McKinsey adds that multiple expansion and cheap leverage accounted for 59% of buyout returns from 2010 to 2022, a tailwind that has now faded.

What that means for you:

• Partner pay usually drops. The Pennsylvania CPA Journal reports cuts from about 10% for newer partners to 50% or more for founders and senior partners, who are paid through the deal instead.
• Growth targets get serious. Expect pressure for acquisitions, pricing changes, more advisory work and efficiency gains.
• Your second payday depends on that growth. Your retained equity only pays off if the platform grows enough to sell at a profit.
• The hold can run long. Accounting deals often run four to seven years, and Bain reports holding periods across all buyouts have drifted toward seven years.

The trade-offs

You get	You give up
A large payment at closing	Control over strategy and pricing
A retained stake with upside	Part of your annual compensation
Capital for technology and hiring	Independence; a board and reporting duties
A succession solution for older partners	Certainty: equity value depends on the investor’s exit

If your firm is smaller

Large investors usually buy big firms directly and buy smaller practices through the platforms they own. If you’re a small or mid-size firm, your “private equity buyer” is most likely a PE-backed accounting platform adding your practice to its network. These deals are usually priced on revenue or a mid-single-digit EBITDA multiple. See how much accounting practices sell for and how to sell an accounting practice.

Questions to ask a private equity buyer

1. How will my firm be split between the CPA firm and the advisory company?
2. What will my compensation be in years one to three, and what is it tied to?
3. How much of my price is cash, how much is retained equity, and are there earnouts?
4. What growth plan does the deal assume, and what happens if we miss it?
5. When do you expect to sell, and how will my retained stake be valued then?
6. What happens to my staff and their roles?