What’s All the Buzz About Private Equity and Other Investor Interest in Public Accounting Firms?

This all started around 3 years ago when Citrin Cooperman and Eisner did transactions with private equity.

I must confess that I wasn't a true believer at the time having seen iterations of CPA roll up efforts in the past with H&R Block, American Express and CBIZ.

I do believe now that this is a primary option for many accounting firms, but not all.

I attended the Accounting Today Private Equity conference in November and walked away with even more belief in this evolution.

My main takeaway from the conference was that a large number of firms will be availing themselves of a capital partner in the future, whether it's PE or other types of organizations.

The main driving force I see is that firms don't have the free cash flow or capital, time or  expertise to fully execute on today's pressing issues including:

- Staffing

- Technology including AI

- Offshoring

- Liquidity and tax advantages for retiring partners

The input at the Accounting Today event from firms that have gone this route was positive and seemed to have energized the partners and staff in addition to bringing a good amount of fresh organizational expertise.

I believe this is a trend that is going to be here for a number of years and hopefully with a very positive impact on the profession.

For anyone worried about the future of the 40,000+  smaller firms, not to worry. Many will merge up or simply phase out, but I believe there is always going to be a need for such firms for small businesses and less affluent individuals.

Happy to speak on this topic anytime at rfligel@rf-resources.com  or 914-924-0963.

Robert

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