By Bruce Zicari, Managing Partner and CEO of The Bonadio Group.
The accounting profession is at a crossroads. Private equity’s swift entrance into the industry has reshaped the competitive landscape, putting pressure on firms of all sizes to rethink their strategies. This new environment demands that firms not only keep pace with rising client expectations but also make deliberate choices about how they will grow, sustain their cultures, and serve the next generation of clients and professionals.
For The Bonadio Group, mergers and acquisitions have long been central to our growth story. Over the last 25 years, the firm has averaged one merger per year, a pace it expects to continue while also targeting 8 to 10 percent annual organic growth. But as the rise of private equity intensifies the race for scale and efficiency, the criteria that drive successful combinations have never been more important.
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Private Equity’s New Role in Accounting
Private equity’s entry into public accounting has becoming a defining trend. Valuations for accounting firms have climbed sharply, with PE-backed deals now setting unprecedented multiples. These transactions reflect both the challenges and opportunities facing the profession: succession planning, technology investment, and talent shortages that have left many firms open to the pressures of outside capital.
For independent firms, this surge of activity has altered the playing field. Competing with PE-backed buyers often means adjusting expectations, shifting acquisition targets, and moving more decisively when opportunities arise. At Bonadio, we’ve narrowed our acquisition focus to smaller firms where cultural alignment and strategic fit are strongest, making the recognition that in a market dominated by well-capitalized players, pursuing smaller but higher-probability transactions is the most effective way to maintain steady growth.
Private equity’s presence also sharpens the competitive edge of the entire industry. The advent of PE in the accounting industry has forced firms to innovate to become quicker, cheaper, and faster. In that sense, disruption is also a motivator: it compels firms to refine their strategies, strengthen their client service models, and invest in the systems that will sustain long-term success.
Positioning Firms for Sustainable Growth
While the financial terms of a deal may capture the headlines, culture remains the single most important factor in determining a merger’s success. At Bonadio, culture emerges as the number one criterion when evaluating potential partners. Of every 8 to 10 firms we engage with over many months of discussions, only one will prove to be the right fit. Without cultural alignment, every other aspect of a merger becomes an uphill battle.
That cultural alignment is judged on several fronts. How does the firm view its role in the marketplace? What is its approach to strategy, to clients, and to its people? Is there clarity of leadership and a willingness to embrace new expectations? And does the geography make sense for extending client service and building stronger teams? Each of these questions is central to deciding whether two firms can grow stronger together.
Just as important is the way new firms are welcomed into the organization. At Bonadio, we don’t view an acquired firm as an add-on. We see them as integral members of our team, entrusted with maintaining and enriching the culture that has guided our growth for nearly five decades. That mindset is essential not only for retention but for ensuring that every merger contributes positively to the client and employee experience.
Financial discipline plays a role as well. Bonadio’s commitment to fully funding partner retirements from day one, coupled with a debt-free balance sheet, has made it possible to grow without sacrificing independence. For firms weighing their own paths forward, these factors are more than numbers on a ledger; they represent long-term stability, which can be just as appealing to potential partners as capital from private equity.
Ultimately, positioning for sustainable growth is not about choosing between independence and outside investment. It’s about having clarity regarding what your firm stands for, where it is going, and how it will serve both clients and its own professionals in a rapidly changing industry.
The accounting profession will continue to see consolidation, both through private equity-backed acquisitions and mergers between large firms. For independent firms willing to embrace innovation, pursue strategic growth, and stay true to their cultures, the future remains full of opportunity. Private equity may be rewriting some of the rules, but the fundamentals of leadership, culture, and client service still define long-term success.
Bruce Zicari is Managing Partner and CEO of The Bonadio Group, where he also serves on the firm’s Management Committee and Board of Directors. With more than 25 years at Bonadio, he has deep expertise in tax and financial audits, strategic planning, financing, mergers and acquisitions, and business valuations. Bruce was named to Forbes’ inaugural list of America’s Top 200 CPAs in 2024.
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