Private Equity and the CPA Profession: What Is Driving the Surge in Deals?
Sikich | Nov 4 2025 | 5 min read | By Kurt Estes
The accounting industry has been undergoing rapid transformation since TowerBrook, a major private equity group, purchased EisnerAmpner in August 2021. That deal kicked off a wave of consolidation across the CPA market. More firms are being acquired either directly by private equity groups or by firms backed with private equity capital.
Citrin Cooperman is one of the most visible examples, receiving investment twice. Since 2021, there have been more than 90 significant private equity investments into CPA firms.
All this activity raises two key questions:
- Why are private equity firms interested in CPA firms?
- Why are CPA firms choosing to sell?
Why Private Equity Wants CPA Firms
Private equity is constantly searching for investments that pair high return potential with managed risk. CPA firms check a lot of boxes.
Highly recurring revenue streams
Assurance and tax work returns every year, and clients typically stay with the firm unless something changes. Recurring revenue reduces investment supports the use of leverage to finance deals.
Fragmented industry
There are thousands of CPA firms, creating opportunities for rapid growth through acquisitions. For example, after being acquired by TowerBank, EisnerAmper completed more than 13 follow-on acquisitions.
Efficiency and profitability improvements
Standardizing processes, automating routine work and eliminating redundant costs create margin expansion.
Cross-sell potential
CPA firms have trusted relationships. Private equity sees opportunities to layer additional advisory services that clients already need.
Why CPA Firms Sell to Private Equity
For many firms, private equity solves problems that have been brewing under the surface.
Liquidity for partners
Partners can take some chips off the table while still participating in future upside. Private equity commonly outlines equity appreciation targets of three to five times over a five-to-seven-year period.
Succession and retirement planning
Firms facing partner retirements or unfunded buyout obligations see private equity as a path to stability.
Capital to grow intelligently
Private equity brings capital for acquisitions, technology and new services that might otherwise take years to fund internally.
Talent attraction and retention
Equity and long-term value creation can be effective as recruiting tools,
Higher valuations
Private equity valuations are often significantly higher than those implied by traditional partner retirement models.
Risks CPA Firms Must Consider
Every deal has tradeoffs. Firms exploring private equity investment should assess potential challenges, including:
- Loss of control – Most private equity investments are structured as majority purchases with voting control.
- Cultural misalignment – CPA firms value long-term client relationships. Private equity is focused on growth, scale and exit timelines. Philosophies can clash.
- Debt on the balance sheet – Private equity deals typically involve leverage. Post-transaction, the firm may carry significant new debt.
- Quality concerns – Pressure to improve profitability can create concerns about maintaining client service standards.
- Talent retention – Equity can help retention, but shifting control may lead to partner disengagement or concerns about reduced future ownership opportunities.
Thinking About Private Equity?
Private equity is not one-size-fits-all. The benefits and risks vary by firm, by investor and by deal structure. Firms considering a sale should seek advisors with both transaction experience and genuine industry knowledge.
Contact our team today. At Sikich, we understand the process from both sides of the table and stand ready to guide firms evaluating their options.
