Private equity has pushed CPA firm valuations higher than anyone expected, and Brannon Poe says the accounting profession still has significant runway left. In this solo episode, Brannon steps away from the usual guest format to share a market update: where private equity stands in accounting M&A, how AI is reshaping which practices are in demand, and what firm owners should understand about valuation before they consider a sale.
Brannon walks through why the accounting industry remains more fragmented than sectors like veterinary, dental, and healthcare, and why that suggests more consolidation is ahead. He explains a shift in buyer demand: as AI absorbs more of the simpler, transactional work, both advisory practices and straightforward individual tax practices are seeing strong interest, while service mixes that once felt safe are being reevaluated.
He also addresses the questions he hears most often. Has private equity permanently changed the profession? Is there a bubble forming? Which firms are not a good fit for a PE sale? Brannon offers grounded, experience-based answers to each, drawing on Poe Group Advisors’ work selling CPA firms since 2003.
The conversation moves into what actually makes a transition successful. Brannon argues that fit, cultural alignment, shared vision, and compatible management styles matter more than most sellers expect, and that talking with a wide pool of potential buyers before committing to one leads to better outcomes on both price and terms. He closes with a look at the fundamentals of valuation, why virtual and metro-area firms tend to draw stronger multiples, and why terms often matter more than the headline number.
The Conversation Covers:
- How AI is shifting buyer demand toward advisory work and away from simpler compliance services
- Why the accounting industry still has more consolidation ahead compared to other PE-driven verticals
- How to know if your firm is a good fit for a Private Equity sale versus a traditional buyer
- Why talking with more potential buyers before granting exclusivity leads to a better outcome
- How location and virtual operations expand your buyer pool and strengthen your valuation
- Why the multiple you see in a headline deal rarely tells the full story
This episode is for firm owners curious about how private equity is changing the accounting profession, practitioners wondering how AI will affect the value of their practice, and anyone exploring a future sale who wants to understand what actually drives valuation.
TIMESTAMPS
00:45 – Why this episode is a solo market update instead of a guest interview
02:10 – The state of the CPA firm M&A market in August 2026
03:40 – Why Accounting Practice valuations keep climbing past projections
05:15 – How the accounting industry compares to more consolidated verticals like veterinary and dental
07:00 – Why AI is shifting demand toward advisory and Tax Practice work
09:20 – Whether Private Equity has permanently changed the Accounting Firm Owner landscape
11:45 – Is there a bubble in Accounting Practice valuations
13:30 – Which CPA Firms should think twice before selling to Private Equity
15:50 – How PE consolidation connects to the Silver Tsunami and Firm Succession
18:10 – Why fit matters more than price in a Public Accounting sale
20:35 – The hiring-process analogy for finding the right buyer
23:00 – A ten year outlook for the Accounting Practice profession
25:20 – Why supply and demand drives CPA Firm valuation
27:15 – How location and virtual firms affect your buyer pool
29:40 – The most common misconception about Practice Management and firm value
31:50 – Why terms matter more than the multiple you see in headlines
TRANSCRIPT
Brannon: I’m Brannon Poe, and this is The Accountant’s Flight Plan podcast, where you can enjoy engaging conversations about mergers and acquisitions and accounting practice management. Listen in on strategies to build a more fun and valuable accounting firm.
Hi, welcome to The Accountant’s Flight Plan podcast. We have a little different format today. I’m going to be solo. Normally we interview a guest, and today we decided to give this format a try. I’m going to talk about a market update: where private equity stands in the accounting M&A space, and I’ll touch on valuation as well. Should be a useful episode.
Let’s start with the state of the market. As of this recording, it’s August of 2026. We have experienced a lot of change this year. Last year, we saw significant private equity consolidation activity, and with that, we saw valuations increase. We worked over our valuation report during the winter and published it in the spring. And about a month ago, we realized it was already out of date. We’re seeing multiples get pushed higher.
At this point in the recording, we’re roughly halfway through the year in terms of the season when firms tend to trade. Demand is high, which is great if you’re a seller in this market. Terms are strengthening. Leverage in general is shifting in favor of our clients. The market remains very strong.
The consolidation wave is worth putting in context. I’ve studied other verticals like veterinary, dental, and healthcare. Those sectors have seen much stronger industry-wide consolidation. The accounting industry, by comparison, is still relatively fragmented. I think there is more consolidation to come.
Will current values hold up? No one can predict this market with certainty. We’ve seen a lot of shifts. One thing we’ve noticed is a change in the demand for certain service mixes. We had a firm this year with a heavy individual tax book. About a year ago, when we spoke with the seller, we tempered expectations on price. Once we brought it to market after tax season, the response surprised us. I think a lot of that is being driven by AI. As PE firms scale, they’re investing heavily in efficiency and technology to handle the simpler parts of accounting work. We’re seeing high demand for advisory practices and also for straightforward individual tax practices, because a lot of that work can be automated or offshored. That is probably going to drive significant change in the profession over the next five to ten years. My expectation is that AI will handle more and more of that simpler work, which will free CPAs to move into higher-level advisory roles.
A question I’ve been asked a lot recently is whether private equity has permanently changed the profession. I think in some ways it will be a fundamental change. I also think it has accelerated changes that were already underway. Accountants have historically been a little slower to change than other industries. It is a profession, and part of its nature has been conservatism and deliberate, well-considered change. What private equity brings is a more entrepreneurial approach. They are more willing to make mistakes, and they have more capital to absorb those mistakes. So you’re seeing faster change. I think the rate of change is going to continue to accelerate, and part of why PE wants to consolidate this industry is precisely because of the new technology available.
For firm owners who feel like things have already changed a lot in the last few years, including how you attract staff, how you manage people, all of it: there is more coming.
Another question I’m hearing often is whether there is a bubble. I think possibly, but I also think it has a ways to go. Will valuations go higher? Maybe. Could they drop? Maybe. It’s genuinely hard to predict. Based on my observations of other industries that have gone through PE consolidation, I believe this sector still has significant runway. We are still talking with new funds entering the space. You’re still seeing headline deals in the top 25 firms. The M&A activity level remains high.
That said, which firms should not sell to PE? The clearest answer is someone who wants to exit quickly. For the most part, PE firms want you to stay on for at least a year, and ideally three years. If your exit timeline is shorter than that, private equity is probably not the right fit. You might consider a PE-backed CPA firm with existing capacity and talent, but the general consolidators typically want a meaningful owner commitment.
Another question I hear is whether PE consolidation will solve the succession problem. There are so many CPAs approaching retirement age, and some people are asking whether this wave of acquisitions will address what has been called the Silver Tsunami. In some ways it will, because as firms get acquired and consolidated, fewer leaders are needed to run them. But there is still a long way to go. A significant number of practitioners will be retiring in the next decade.
A few thoughts on what makes a good transition. We have been selling CPA firms since 2003 and have seen a lot of outcomes. What I keep coming back to is fit: cultural fit, alignment of vision between buyer and seller, alignment of management styles, and alignment of values. Fit is one of those things that can get lost when you are deep in a deal, because you get focused on price and negotiation and due diligence and attorneys. It’s easy to lose sight of what actually matters most.
What I find is that sellers who are genuinely committed to finding the right fit, and who are willing to have conversations with many potential buyers before granting exclusivity to one, end up in a much better position. Think about a hiring process for a critical role. You would not interview one person and stop. You would review resumes, do phone screens, bring in a colleague for a first round, narrow it down to five or six strong candidates, and then make a well-informed decision. And as you go through that process, your vision of the ideal candidate becomes clearer. The qualities you want to prioritize sharpen. The personality fit becomes more concrete. Selling your firm works the same way. Sellers who talk with more potential buyers before committing develop a clearer picture of what they are actually looking for. They are able to assess fit more carefully and filter out candidates who are unlikely to be good partners early in the process. That is the approach that leads to a good transition.
Planning and logistics matter too. But fit is the foundation.
Looking ahead ten years: I think the profession is going to be more AI-driven, more profitable, and changing faster than most people expect. The simpler, lower-level work will be increasingly automated. Private equity will continue to push pricing upward. Accountants have historically underpriced their work, and that is changing.
One more thing I wish more owners understood before they start thinking about a sale: the importance of having and articulating a clear vision for the firm. A lot of firm owners spend most of their time in the day-to-day and not enough time on visionary thinking. Buyers are genuinely attracted to firms with a strong, compelling vision. And if that vision is shared between buyer and seller, and it’s the kind of vision the team can get excited about, it becomes a powerful force for keeping the team together and making the transition successful. Don’t underestimate the power of vision.
On valuation: the fundamentals are timeless, even if the current market has pushed multiples higher. Valuation is a supply and demand equation. If you have a practice and 100 qualified buyers, you’re going to see better price, better fit, and better terms than if you’re negotiating with one buyer or a small handful. The best way to maximize value is to maximize the number of potential buyers.
Location illustrates this clearly. Virtual and cloud firms draw the widest buyer pool because they can be operated from anywhere. We sold a practice for a firm owner who had moved to Australia and was running a US-based practice from there. The buyer was in the US. Fully virtual firms open up your buyer pool to essentially the entire country. We consistently see higher demand and stronger multiples on those practices. Large metropolitan areas follow: a Los Angeles or Dallas-Fort Worth practice will draw more buyers simply by virtue of geography.
Supply and demand drives valuation. The consolidation wave has brought more demand into the market, which is why we’re seeing higher multiples. If you want to maximize value and find the right fit, maximize your pool of potential buyers.
The most common misconception I see is that firm owners either significantly underestimate or significantly overestimate the value of their firm. Pricing is an art, not a science, because every buyer will have a different opinion of value and will make very different offers. When we have multiple offers on a practice, they cluster: eight out of ten will land around a similar range, with outliers on both ends. But even within that cluster, the terms vary widely.
And that’s the part I want to emphasize: people focus too much on price and not enough on terms. When you read about a headline deal in Accounting Today or the Wall Street Journal, you don’t know the terms. You don’t know how much cash closed at signing, what the earnout targets were, how rollover equity is being valued, or what the seller committed to in terms of staying on. Without understanding the terms, a multiple tells you very little. A high multiple with difficult terms can be worth less than a lower multiple with clean, cash-heavy structure. If you’re evaluating an offer, the question to ask is not just what’s the multiple, but how much cash am I actually getting at closing, and what am I committing to in order to get there.
Those are my market thoughts for August 2026. It’s a rapidly shifting environment and an exciting time to be in the accounting M&A space. I never expected accounting to become such a hot sector, and here we are.
If you have thoughts on any of this, we’d love to hear from you. You can reach us through our website at poegroupadvisors.com. If you’re interested in selling, you can also book a strategy session with us there. Thanks for listening and we’d love your feedback on this solo format.
