Mid-tier accounting firms are seeking new approaches to finance their growth. In November, the US accounting firm Forvis acquired the US operations of the French firm Mazars to strengthen its audit and advisory capabilities. Earlier, BDO implemented an employee stock ownership plan to enhance recruitment. Recently, Chicago-based Grant Thornton sold a stake to private equity fund New Mountain Capital to accelerate investments in technology and personnel, aiming to attract larger corporate clients that have traditionally preferred the Big Four firms—Deloitte, EY, KPMG, and PwC.

The traditional partnership model is proving inadequate due to its capital constraints. Profits are often redistributed among partners, and the firms face significant retirement obligations. At the same time, there is a need for substantial investment in artificial intelligence to boost consulting services and profitability.

Recognizing opportunities for consolidation, private equity (PE) firms have invested in several top US accounting firms in recent years. For instance, Tower Brook Capital invested in EisnerAmper, New Mountain Capital took a stake in Citrin Cooperman, and Parthenon Capital acquired shares in Cherry Bekaert.

In February 2024, Baker Tilly US entered into a $1 billion agreement with Hellman & Friedman and Valeas Capital Partners. Soon after, Grant Thornton’s American branch announced an investment by New Mountain Capital. These investments have proven successful, with Citrin Cooperman completing 17 acquisitions since receiving capital from New Mountain Capital, growing into a $600 million firm.

The trend is not confined to the US. Globally, private equity interest is evident in the UK, where Hg and PAI Partners are shareholders in Azets, a top 10 UK accounting firm that has acquired 90 local providers. Additionally, Waterland Private Equity has invested in Moore Kingston Smith and Cooper Parry, two other prominent UK accounting firms.