Accounting firm M&A on the rise

Private equity is fueling a wave of mergers and acquisitions among accounting firms, with transaction volume rising 26% year-over-year in 2025 and continuing to climb in 2026, according to a new report.

The report, from Capstone Partners, a Boston-based investment banking firm, found a significant shift in buyer composition, with financial acquirers now accounting for 54% of sector deal volume, driven by growing adoption of alternative practice structures such as the kind now common in private equity-funded deals. Persistent labor shortages and evolving client demand are prompting accounting firms to expand beyond their traditional tax and audit offerings into advisory, technology and consulting services.

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Capital raising for accounting services-focused funds rebounded in 2025 from a decline in 2024 and has continued to trend upward so far this year. Total private equity capital raised for sector-specific funds has risen 16.1% year over year to $12.7 billion year to date. Buyout funds have made up the vast majority of PE capital (87.9%) raised in the sector to date, which seems to bode well for accounting services M&A activity throughout the year. In addition, the median size for accounting services-focused funds has increased 23.6% year over year to $581 million through this year to date in 2026. That indicates that sponsors may move upmarket for platform transactions or further accelerate add-on dealmaking.

"Technology transformation has become a strategic requirement in accounting services M&A, not a value enhancer," said Capstone director Erik Larson, the lead contributor in the report, in a statement. "Investors are weighting AI readiness, organic growth quality and operational discipline more heavily than market size or M&A runway, reflecting a shift toward firms that can deploy capital to improve delivery, scale efficiently, and expand into higher-value advisory services—a compelling opportunity for those well positioned and thoughtfully prepared." 

The report noted the private sector has increasingly depended on accounting firms to help them navigate tax reforms from the One Big Beautiful Bill Act, which targeted businesses and high-net-worth individuals. As a result, accounting firms have increasingly broadened offerings to bolster cross-selling opportunities and capitalize on the sector's ample white space. These ambitions provide a favorable outlook for accounting services' sector M&A growth throughout 2026, which is expected to build on the gains last year.