By: Steve Wasylenko, Vice President
As we move into 2026, the CPA firm industry continues to experience one of the most consequential periods of transformation in its history. From our vantage point advising accounting, tax, and diversified financial services firms, the pace and nature of this change are having a direct and measurable impact on firm valuations, buyer appetite, and transaction structures.
On the heels of several years of record transaction volume, with PE-sponsored platforms completing more than 200 acquisitions of U.S. accounting and advisory firms in 2024 and 2025, it is clear that the train will keep moving. However, the investor community has sharpened its lens considerably. The profile of an “ideal target” looks meaningfully different today than it did 24 months ago. Firms that understand these shifts, and position accordingly, will be best prepared to capitalize on an increasingly competitive M&A environment.
Across all firm sizes, one theme has emerged with remarkable consistency: firms that can demonstrate true differentiation command premium valuations and attract the most compelling partnership options.
Generic, full-service practices, while still transactable, face greater pricing pressure and longer deal timelines. By contrast, firms with a clearly articulated competitive edge, what we at Falcon Capital Partners call a “Superpower,” continue to attract heavy interest. We are seeing the strongest valuation outcomes for firms with one or more of the following:
1. Market Dominance: Being a top-5 firm in a major metropolitan area or dominant regional market remains a highly attractive value driver. Scale creates barriers to entry, pricing power, and a natural platform for further consolidation.
2. Industry Specialization: Firms with deep, demonstrable expertise in a specific vertical: real estate, healthcare, financial services, technology, manufacturing, for example, are commanding a significant premium. Buyers are willing to pay up for practices where industry knowledge is embedded in the firm’s DNA and where scaling that vertical nationally is a realistic near-term growth lever.
3. Service Offering Specialization: Not all revenue is created equal. Certain service lines consistently attract higher valuations due to superior growth rates, margin profiles, and recurring revenue characteristics. Tax services (particularly specialty and complex tax), advisory services, outsourced CFO/accounting, and wealth management are among the most sought-after capabilities in today’s market. Practices generating 30%+ of revenue from advisory or non-attest services are frequently seeing valuation premiums of 20–30% relative to traditional audit-heavy peers.
It is rare to encounter a Managing Partner who does not, at the outset, express a strong desire to remain independent: to protect their culture, preserve their identity, and maintain control over the firm they have spent decades building. We respect and understand that instinct deeply.
That said, we are witnessing a meaningful shift in how Managing Partners and their Leadership Teams evaluate partnership options. Independence is no longer viewed as binary. The emergence of sophisticated PE-backed platforms, many of which offer minority recapitalizations, earnouts, and equity rollover structures, has created a middle path that allows firms to monetize a portion of their equity while retaining significant operational autonomy and upside participation.
The question has evolved from “Should we remain independent?” to “What structure of partnership best aligns with our growth objectives and the long-term interests of our partners and people?”
Firms evaluating strategic alternatives are consistently navigating the same set of pressure points. These dynamics are not new, but their urgency has intensified.
While tax and audit services remain foundational and provide topline durability, revenue composition has become a critical differentiator in 2026. Firms with a growing mix of advisory services: transaction support, outsourced CFO and accounting services, AI and technology integration, and operational consulting – are generating higher growth rates and stronger margin profiles, with greater capacity to cross-sell among the client base.
This trend reflects broader market forces. In periods of robust M&A activity, and with deal volumes recovering sharply in late 2025 and into 2026, advisory and transaction-support capabilities have become disproportionately valuable. Growing these practices further protects against pricing pressure and commoditization in traditional compliance services, which continue to face headwinds from technology-driven automation and low-cost offshore competition.
Notably, the composition of acquisition targets is beginning to shift. The volume of traditional CPA firm tuck-ins is being increasingly complemented, and in some cases surpassed, by bolt-on acquisitions of advisory, consulting, and technology-enabled service businesses, as PE-backed platforms aggressively build out non-attest capabilities.
People remain the most valuable, and most scrutinized, asset in any CPA firm transaction. Buyers are increasingly focused on several dimensions of human capital:
Technology has completed its transition from back-office support functions to a core determinant of enterprise value. This shift is now clearly visible across buyer diligence processes and in the multiples being paid.
AI-powered tools and advanced automation are no longer aspirational – they are expected. The firms achieving the strongest outcomes are those that have moved beyond experimentation and deployed technology in ways that meaningfully:
The investment required to build or acquire these capabilities, and to continuously evolve them, is significant and increasingly difficult to fund organically. Access to capital, in particular private equity, enables platform firms to invest at a pace and scale that independent firms simply cannot match, creating a widening capability gap that is itself a driver of consolidation.
Many of the PE-backed platforms that led the initial wave of accounting firm consolidation including names such as Eisner Amper (TowerBrook Capital), Cherry Bekaert (Parthenon Capital), and Baker Tilly (Hellman & Friedman) among others, are now approaching natural inflection points within their hold periods. Most PE funds operate on a 5-7 year hold timeline, meaning a number of early-mover platforms are entering the zone where sponsors must begin evaluating full exits, partial liquidity events, or continuation vehicles.
These secondary and tertiary transactions will serve as critical data points for the broader market. Firms who more recently became a Private Equity platform investment or that merged into a larger PE-backed organization are closely watching how these exits unfold, as they will validate (or stress-test) the assumptions underpinning the consolidation model. A successful high-profile exit at a strong multiple would serve as a powerful accelerant to deal activity. Conversely, any reset in valuation expectations would prompt recalibration across the market.
We also expect to see increased activity in continuation funds and GP-led secondaries, as sponsors seek to extend hold periods on their highest-performing assets rather than force exits in a suboptimal environment.
We expect 2026 to be a year of transformation rather than disruption, but the distinction matters only for firms that are proactively engaged in shaping their future.
The firms best positioned to lead will be those that:
Market demand for quality firms remains strong. Buyer expectations are evolving rapidly. And the window for achieving premium valuations, while available to firms that are well-positioned…is not unlimited.
For firms that are serious about understanding their options, now is the time to get informed, get organized, and get positioned.
Falcon Capital Partners is a boutique investment bank providing sell-side strategic and investment banking advisory services to accounting, tax, and diversified financial services firms. To learn more about how we can help your firm evaluate its strategic options, please contact us.
Mr. Wasylenko is a Registered Representative of and Securities Products are offered through BA Securities, LLC Member FINRA, SIPC. Falcon Capital Partners and BA Securities, LLC are separate and unaffiliated entities.
© 2026 Falcon Capital Partners. All rights reserved. This article is intended for informational purposes only and does not constitute investment, legal, or financial advice.