every year, the 2025 rosenberg map survey asks the industry’s top consultants to share their observations from cpa firms across the country: how do you think the next 12 months will unfold? trends? predictions? other thoughts? also, how would you assess the last 12 months? trends? observations? struggles?
valuations have changed … and risen.
by phil whitman
the rosenberg survey
while many trends will continue, here are my top 10 predictions:
- traditional m&a activity, cpa firm to cpa firm, will continue to be very robust.
not all cpa firms will qualify for investment by private equity and other strategic investors. as such, firms will combine for a variety of reasons including: succession and transitions, increasing profitability and gross revenues, expansion of service offerings, expansion of geographic coverage as well as adding additional depth and breadth in existing service lines.
more: the 2025 rosenberg map survey is available from 卡塔尔世界杯常规比赛时间 here.
- valuations of cpa firms will increase as private equity creates bidding wars between each other. we have already seen demand of cpa firms of certain sizes exceeding supply. as such, we believe that even the larger private equity-backed firms will see acquisitions of smaller firms as not only lucrative additions but significantly more supply. approximately 10,000 +\- firms with two or more partners that are members of the aicpa. many of these smaller firms are very profitable and have been seeing multiples of two to three times gross revenues.
- more transactions, including traditional cpa firm to cpa firm, will have cash upfront component because of competition with firms that have taken investments by pe and other strategics. cash is king! almost every seller today is asking about cash up front. while not as significant as that of a private equity transaction, traditional cpa to cpa firm transactions almost always now include an upfront cash component.
- we will continue to see an increase in top 100 firms with topline revenues of more than a billion dollars. to date there are 11 cpa firms with revenues of greater than $1 billion. with pe-backed rollups like aprio, ascend and crete, we will see additional entrants into the billion dollar club.
- we will continue to see a significant shift in cpa firm governance as firm ownership continues to include non-cpa firm owners. the corporate governance model will enable cpa firms to make decisions more quickly. partners will have time to focus on the highest value of their time, which is often client relationships and business development.
- a significant number of firms will adopt alternate practice structures as they either prepare for a transaction with non-cpa firm owners or as a means of isolating risk inherent in certain attest function practice areas.
- cpa firms shifting toward a multidisciplinary business. in the past year we saw aprio and kpmg acquire interests in arizona law firms. the alternate practice structure allows firms to leverage such practices.
- offshoring will continue to grow with more and different geographies and firms using in multiple ways.
- turnkey advisory service offerings will become prominent as cpa firms partner with organizations that have already built out the desired services.
- artificial intelligence will become more focused and will begin making significant differences in the way cpa firms practice. the rate at which technology is expanding is at light speed and innovative firms have already begun using ai on a daily basis.
with new mountain’s ownership of citrin cooperman being sold to blackstone, we have seen a surge in new buyers and sellers entering the cpa firm m&a market for fear of missing out (fomo). new and smaller private equity groups and other strategic investors have come to market with very diferent theses. transactions now frequently include firms with as little as $1 million in annual revenue, as well as those of all sizes above that. we have seen firms as small as $1.8 million in total collected fees being left as a foundational firm with no change in culture, leadership or firm name. notably, these new players have shifted valuation methods away from the traditional top-line revenue multiple. we’ve observed an almost exclusive use of ebitda-based valuations, derived through so-called “compensation scrape” models – essentially assessing how much equity partner compensation can be “left behind” for strategic investors, not only by private equity groups, but by cpa firms that have adopted the private equity model. multiples being applied have increased and have ranged from a low of about 4x to the mid-teens, with valuations climbing as high as 15x-16x ebitda for the most attractive deals.
the transformation of the cpa m&a landscape has brought in a more diverse pool of investors. in addition to private equity, frequent acquirers include family offices, publicly traded companies, wealth management funds and even pension funds. to date, nearly two dozen major private equity-related transactions were tracked and it is projected that more than half of the top 30 u.s. cpa firms will have some form of outside ownership by year’s end.
talent challenges continue, and offshoring and outsourcing have become essential strategies for dealing with the acute talent shortage facing the profession. rather than being solely about increasing margins, offshoring is now a necessity – many firms simply cannot find enough qualified professionals domestically, forcing them to turn away work and scale back business development initiatives. nearly 50 percent of u.s. cpa firms now offshore or outsource work, including those with less than $5 million in revenue; this rate continues to rise each year. during covid-19, single-country offshoring strategies proved risky, as lockdowns in places like india heavily disrupted operations. now, multipronged offshoring solutions are commonplace, leveraging talent in the philippines, south africa, colombia, mexico and vietnam in addition to india.
the talent crisis is at historic levels: between july 2023 and june 2024, nearly 640 u.s.-listed companies cited material weaknesses related to accounting staffing shortages. the situation is so acute that while placements of offshore cpas (e.g., in the philippines) once took less than two weeks, the surge in demand now means placement timelines have stretched to three or four weeks and even longer. the accounting labor market has lost tens of thousands of public accounting professionals in the last year, primarily because of retirements and career changes. despite these challenges, private equity-backed cpa firms with near 24/7 recruiting models have done a very good job of attracting talent to their new and differentiated models.
in short, the cpa industry over the past year has undergone dramatic changes: new investors, evolving deal structures, urgent offshoring trends, an unparalleled talent crisis and bold expansion into new service lines – all of which are reshaping firm strategy and the broader profession.