Key Takeaways
- • Private equity has acquired approximately 24 of the top 100 U.S. CPA firms since 2021, including at least 10 of the top 30, fundamentally reshaping the traditionally partnership-governed accounting profession.
- • The "flip" era has arrived: Citrin Cooperman transitioned from New Mountain Capital to Blackstone in January 2025, and Schellman moved from Lightyear Capital to Goldman Sachs Alternatives in 2026, signaling the first wave of PE-to-PE ownership transitions as initial three-to-seven year holding periods expire.
- • PE investors are now targeting "middleweights"—accounting firms with $75–$400 million in revenue—after consolidating larger firms; Q1 2026 recorded 64 PE transactions alone, with industry consolidation increasing fourfold since 2021.
- • Second-generation PE ownership faces steeper value creation challenges than the first wave, as early adopters benefited from clear acquisition and operational improvement pathways in a fragmented market; subsequent investors will encounter a more consolidated, competitive landscape.
- • Expert forecasts anticipate a significant acceleration in PE flips, with more transactions expected in 2027 than 2026, and substantially higher volumes by 2028, according to Allan Koltin, CEO of Koltin Consulting Group.
Summary
The accounting industry is entering a transformative phase characterized by rapid private equity ownership transitions, marking a structural departure from the sector's century-old partnership model. Since EisnerAmper's landmark deal with TowerBrook Capital in 2021, PE funds have acquired roughly 24 of the top 100 U.S. CPA firms, including a meaningful portion of the top 30 firms. This initial wave of consolidation has been dramatic: the International Federation of Accountants reports that consolidation activity has increased fourfold since 2021, with PE-backed firms pursuing aggressive acquisition strategies to drive growth and operational synergies.
The momentum has now shifted into what industry participants term the "flip" era—the resale of PE-acquired firms to other financial sponsors as initial holding periods conclude. Citrin Cooperman's transition from New Mountain Capital to Blackstone in January 2025 marked the first such flip, followed by Schellman's movement from Lightyear Capital (which acquired it in 2021) to Goldman Sachs Alternatives in 2026. These transactions reflect the typical three-to-seven year investment horizon characteristic of PE fund structures, during which sponsors seek liquidity events and profit realization.
The composition of target firms is also evolving. After consolidating the largest accounting practices, PE investors have redirected focus toward "middleweights"—firms generating $75–$400 million in annual revenue—where similar consolidation and value-creation opportunities remain abundant. Q1 2026 alone recorded 64 PE transactions in the accounting space, underscoring the velocity of deal activity.
However, second-generation PE ownership presents distinct challenges. The first cohort of investors entered an industry characterized by fragmentation and clear operational improvement pathways, enabling substantial revenue growth through acquisitions and efficiency gains. Subsequent sponsors will inherit a more consolidated competitive environment where value creation requires more sophisticated strategies. Industry observers, including Allan Koltin of Koltin Consulting Group, project significant acceleration in flips, anticipating more transactions in 2027 than 2026, with substantially higher volumes materializing by 2028, suggesting the flip cycle will define accounting industry dynamics through the remainder of this decade.
The momentum has now shifted into what industry participants term the "flip" era—the resale of PE-acquired firms to other financial sponsors as initial holding periods conclude. Citrin Cooperman's transition from New Mountain Capital to Blackstone in January 2025 marked the first such flip, followed by Schellman's movement from Lightyear Capital (which acquired it in 2021) to Goldman Sachs Alternatives in 2026. These transactions reflect the typical three-to-seven year investment horizon characteristic of PE fund structures, during which sponsors seek liquidity events and profit realization.
The composition of target firms is also evolving. After consolidating the largest accounting practices, PE investors have redirected focus toward "middleweights"—firms generating $75–$400 million in annual revenue—where similar consolidation and value-creation opportunities remain abundant. Q1 2026 alone recorded 64 PE transactions in the accounting space, underscoring the velocity of deal activity.
However, second-generation PE ownership presents distinct challenges. The first cohort of investors entered an industry characterized by fragmentation and clear operational improvement pathways, enabling substantial revenue growth through acquisitions and efficiency gains. Subsequent sponsors will inherit a more consolidated competitive environment where value creation requires more sophisticated strategies. Industry observers, including Allan Koltin of Koltin Consulting Group, project significant acceleration in flips, anticipating more transactions in 2027 than 2026, with substantially higher volumes materializing by 2028, suggesting the flip cycle will define accounting industry dynamics through the remainder of this decade.
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