Accounting & CPA Business Valuation
Accounting & CPA businesses are typically priced on one of two earnings figures depending on size: Seller's Discretionary Earnings (SDE) below roughly $1M, and EBITDA above. Applied to accounting & cpa specifically, the base multiple ranges are 1.5x–2.75x SDE and 3.5x–6.5x EBITDA. Where inside that range your business trades is decided by a handful of specific, buyer-visible factors.
The accounting industry crossed a threshold in 2021 when TowerBrook took a majority stake in EisnerAmper — the first time a top-100 CPA firm went PE. Since then Ascend Partner Firms (backed by Alpine Investors), Aprio (Charlesbank), Baker Tilly (Hellman & Friedman + Valeas), Springline Advisory, Rise Growth Partners, Elliott Davis, and Citrin Cooperman have deployed billions to consolidate mid-market accounting. Sub-$5M-revenue independent firms are the primary bolt-on target. Multiples have moved from historical 1.0–1.2x revenue (or 4–6x EBITDA) to 1.4–1.8x revenue / 8–12x EBITDA for firms with strong recurring compliance work, an advisory practice, and demonstrable partner-succession bench. The CPA talent shortage is the single biggest structural tailwind — every acquirer is buying people at least as much as they're buying revenue.
What moves the multiple
Accounting & CPA valuation drivers
Industry sets the base range. These specific business-level factors move you up or down inside it.
Recurring compliance revenue percentage
Percentage of revenue from recurring engagements — monthly bookkeeping, quarterly reviews, annual tax + audit compliance. 70%+ is the threshold that turns a project-shop into an annuity buyers will pay premium multiples for.
Advisory / CAS revenue mix
Percent of revenue from client accounting services (CAS), CFO / controller outsourcing, and higher-value advisory work. Buyers pay premiums for firms that have transitioned beyond commodity 1040s and 1120s.
Partner-succession bench
Number of non-owner senior managers or partners on track to buy in. Owner-only firms trade at meaningfully lower multiples because the buyer inherits full succession risk.
Client concentration
Percentage of revenue from the top 10 clients. Buyers discount firms with above 25% concentration in any single client and heavily discount above 40%.
Vertical specialization
Firms with a dominant vertical (construction, medical, real estate, dental, cannabis, ERC-adjacent) command premiums to generalist firms because the client base is stickier and the expertise doesn't commoditize.
Deal structure
How accounting & cpa deals close
Structures vary widely by firm size. Sub-$2M revenue firms typically close as asset sales with a 20–40% cash-at-close / balance in a 3–5 year earn-out tied to client retention. $2–10M firms increasingly close as stock/equity deals with the seller rolling 20–40% equity into the acquiring platform and a 3–5 year employment agreement. PE-backed platforms have institutionalized playbooks: standardized diligence packets, aggressive transition periods (partners typically stay 3–5 years post-close), and structured earn-outs tied to revenue retention and net-new advisory revenue. The deal doesn't happen without a credible succession plan for partner-owner workload transfer.
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Common questions
Accounting & CPA valuation FAQ
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