Why has there been such an increase in private equity buyers acquiring accounting firms and what does this mean for the industry? In this episode of the Accountant’s Flight Plan Podcast Brannon dives deeper into the subject and what it means for your firm with accounting practice intermediary, Laurens Ball and California market leader, Morry Brown. Laurens has been brokering deals on our team for over four years now and Morry, a member of our sales team, has a background in outsourced CFO services and global investment banking with Goldman Sachs and Citigroup. In this episode, you will learn why private equity is here and how it could benefit the profession in the long run.
Private equity has entered the accounting world primarily because they see the value that CPAs provide. With the staffing shortage in full swing, accounting and bookkeeping services are in high demand. This means that accountants have more pricing power than they realize. With the opportunity to raise prices and increase revenue, firm owners could increase topline revenue and cash flow creating more value in their firms.
Buyers with private equity backing see this potential and want to capitalize on it. With the knowledge and experience to implement or streamline systems while consolidating multiple CPA firms, private equity buyers could optimize firms effectively. While this potential is exciting and comes with the opportunity for selling at progressively higher multiples, it is important for sellers to keep their vision top of mind.
Whether selling to a private equity firm or not, finding the right fit buyer is key. Knowing what the buyer’s vision is and how they hope to grow the firm after close is crucial to knowing whether or not the deal will be successful. Clueing into the non-monetary elements of an offer is vital to knowing whether or not it is the right one for you and your employees.
Are you considering a private equity buyer or looking to learn more about how the current market increases your pricing power as a firm owner? Read our Private Equity Market Report to dive deeper into this topic and learn what questions you should ask when considering these types of deals: Private Equity M&A in the Accounting Industry
You can listen to the podcast on the player below or watch the latest episode here!
Time stamps:
1:55 – Overview of where we are with Private Equity in the Accounting Industry
3:36 – How do you know if a PE buyer is right for you?
8:22 – Private equity’s impact on pricing valuation
10:50 – Will private equity increase top-line revenue?
14:15 – Knowing the buyer’s vision can indicate success
31:59 – Market knowledge & the non-monetary elements of an offer
35:00 – Wrap up and – book recommendations
- Brannon – To Be Loved – by Berry Gordy
- Morry – Life – Keith Richards
- Laurens – Shoe Dog – by Phil Knight
About Laurens:
(Accounting Practice Intermediary)
With more than 10 years of experience in account management and business development experience, Laurens specializes in working with clients to reach their goals. She brings a passion for building strong, long term client relationships to the Poe Group Advisors team. Her holistic approach and exceptional service make the process simple and streamlined every step of the way. Laurens began her career in New York, working for a wholesale company, where she successfully grew her clients into multi-million dollar revenue streams in just four years. She then took her experience to startups, optimizing their business processes, including building strategic services, developing forecasting tools and implementing financial reports.
About Morry:
Regional Market Leader (CA)
Morry brings many years of experience in the financial industry to the Poe Group team. He spent the first 15 years of his career as a stock analyst and during his tenure, worked with several global investment banks (including Goldman Sachs and Citigroup), primarily following the retail consumer sector. Morry’s expertise gained him frequent features on CNBC and in other publications such as The Wall Street Journal, Forbes and Barron’s.
Post-Wall Street, Morry founded a responsible investment app, allowing individual investors to easily invest in a customized ESG-driven portfolio. He has also provided outsourced CFO services to early-stage startups, assisting with fundraising, M&A advisory, pro forma financial projections and investor relations.
