Mergers and Acquisitions for CPA Firms
How do you envision your firm’s future?
Are you considering selling or merging your firm?
Are you thinking of buying a firm or merging in a smaller firm?
Are you exploring an infusion of capital from a PE firm?
Are you committed to remaining independent and growing via strategic acquisitions?
Does your firm need access to capital?
Mergers and acquisitions (M&A) play a pivotal role in the growth strategy of CPA firms. At Capstone Partners, our M&A advisory services provide CPA firms with the insights and support necessary to navigate these complex transactions successfully. We understand that each firm has unique goals and challenges, and we tailor our approach to fulfill those specific needs while retaining your identity and culture.
Some of the challenges in the current landscape that have created the perfect storm for increased M&A activity include:
Difficulty with talent recruitment and retention
Keeping up with technology
Poor Succession
Expanding service offerings (incl advisory)
Current infrastructure unable to support growth
Access to capital
Concern about competing with firms that have obtained an infusion of capital via PE
Lack of full partner accountability
Partnership model is viewed by some as an “inefficient democracy", impeding nimble decision-making
FOMO - Fear of missing out
Funding retirements
Making the decision to explore M&A opportunities is likely the biggest decision your firm will ever make. To make an informed decision, you and your firm leadership must understand the complexities, economics, pros and cons and deal structure specific to M&A transactions, as well as the impact on your partners, team members and clients.
Let Capstone Partners be your guide.
In this dynamic marketplace, the leaders of today’s accounting firms have several strategic options to consider for their firms’ future
• Acquire/merge in firms or practices
• Sell or merge up into another firm
• Capital infusion from private equity (Platform firm or tuck-in)
- • Remain Independent (grow via strategic acquisitions, among others)
We work closely with firms of all sizes across the country, including Private Equity platform firms, Private Equity firms, as well as independent CPA firms and non-CPA firms.
Let us help you explore your options. if you choose M&A, Here’s what Capstone Partners does for you:
We “get to know you”. Each firm is unique. We familiarize ourselves with your firm metrics, your culture, your expectations, your needs, and your timeline. Otherwise, how can we identify the right fit and promote you to buyers/sellers?
Define and evaluate your goals, culture and growth strategy.
Confirm and ensure leadership buy-in.
Identify and target firms which are compatible with your criteria and culture.
Facilitate introductions.
Act as a conduit and buffer between the parties; ie “hold your hand” as necessary.
Identify inherent risks and opportunities of each potential opportunity.
Review and negotiate deal terms through closing.
Assist with post-merger integration.
Post-Merger Integration
A signed deal is just the beginning. Realizing its full value depends on successful post-merger integration. Many deals fail during this post-merger stage.
We help create a transition plan to merge cultures, navigate communications, optimize synergies, and integrate operations. This ensures a smooth transition for both your team and your clients, building a stronger, unified post-merger firm.
Our services guide you through every phase of the M&A process. From the initial strategy meeting and confidential discussions to cultural fit to intricate negotiations, we serve as your trusted advisor. We help structure financially sound deals, manage risk, and ensure every move is geared to enhance your firm’s value, market position and comfort level.
Think outside the box of traditional CPA firms
In the current landscape, many of our clients – whether PE firms or independent CPA firms- are seeking M&A opportunities outside the traditional CPA firm arena. These include IT Consulting firms, cybersecurity, wealth management and CFO outsourcing, among others. As a result, we are continuously exploring the market to uncover some of these non-traditional, non-CPA firm opportunities.
Remaining independent
For a variety of reasons, many firms choose to remain independent, most of which are “fiercely independent.” Each firm charts its unique growth strategy, each firm has its own risk tolerance, and each firm has its own identity and culture. In a profession undergoing rapid transformation, and in which M&A and private equity transactions are often deemed inevitable, it is still possible for firms to remain independent..and thrive. Independence must be a strategy, and it must be intentional.
Independent firms must be strategic about differentiating themselves. Key differentiators are close, sticky relationships with clients, strong focus on professional development, creative access to capital, and most importantly, a clearly-defined, unique firm culture.
In order to compete and foster sustainable growth, firm leadership must adopt new approaches to strategy and governance. These include succession planning, developing next-gen leaders, investing in talent acquisition and retention, investing in technology, making strategic acquisitions, reexamining the terms of partner retirements, expanding advisory services, offering a niche or specialty practice, cross-selling, offshoring, raising rates to increase margins, and culling substandard clients.
Independent firms do not have access to the same capital as those firms which received a PE infusion of capital. To compete against these well-funded Pe-backed firms, they must be nimble and identify other means of capital such as bank lines of credit, SBA loans, internal capital or ESOPs.
For those firms wishing to remain independent, we offer practice management solutions to help you thrive and stay competitive. Please reach out to us.
Culture is Paramount
Cultural alignment between combining firms is paramount to the success of any M&A transaction.
Economics is just one piece of the puzzle. While deal economics and metrics are undoubtedly crucial, compatibility with the firm you partner with is equally vital. Cultural alignment and shared vision play significant roles in the long-term success of any deal; not just the economics. Cultural misalignment often results in a failed deal and should be avoided.
A clearly-defined post-merger culture provides a solid foundation for the new merged entity to thrive and succeed.
Our customized approach
Mergers and acquisitions (M&A) play a pivotal role in the growth strategy of CPA firms, allowing them to enhance their service offerings, expand market reach, access capital , resources, talent and technology, address succession issues, and increase overall competitiveness, among others. This creates a precise profile of your ideal partner, saving time and ensuring we only pursue opportunities that align with your firm's long-term vision and cultural fit.
A successful M&A transaction begins with a clear vision. We work with your leadership to define your strategic goals, challenges and expectations. We understand that each firm has its unique set of goals and challenges as well as its unique culture. Accordingly, we tailor our approach -and target firms- to match your specific needs.
As a result, we do not engage in multiple listings and we do not introduce multiple candidates to multiple clients willy nilly. We are intimately familiar with our client firms and know the target firms as well. Every target is not a good fit for every client. We employ customized searches for each client, whether buying or selling. We are consultative and utilize a tailored approach.
Helping CPA firms navigate their future
Let's discuss your unique objectives and map out a clear strategy for success. Whether you're looking to buy, sell, or merge, our expertise can be the catalyst for your firm’s most significant innovations.