Assessing Your Options: M&A, PE and Hybrid Deals

For many years, merger and acquisition (M&A) activity in the public accounting industry was primarily driven by succession planning issues. While succession challenges still play a role in a firm’s decision to sell or merge, there are many other factors that are driving the elevated levels of M&A transactions throughout the country, such as: 

• Difficulty in attracting and retaining professionals to provide quality services to clients 

• Private equity making significant investments in CPA firms, providing more opportunities and options in the M&A marketplace, including for smaller firms known as “tuck-ins”

• Lack of sufficient revenue growth due to the labor shortage

• Generalist firms with the absence of high-demand niches, specialty services and formal integrated advisory services, leading to a loss of competitive edge in their local marketplace to larger firms with more resources

• Inability for the partners to agree on a strategic plan together with the necessary investments in resources to remain independent

• Minimal partner accountability for performance and profitability

In this dynamic marketplace, the leaders of today’s accounting firms have several strategic options to consider for their firms’ future. 

Read the full blog by Joe Tarasco, CEO and Senior Consultant, Accountants Advisory Group, on NJCPA.org.