Following the lead of CohnReznick and EisnerAmper, accounting firm Moss Adams is currently in advanced talks to receive private-equity funding via a merger with peer Baker Tilly, according to The Wall Street Journal, citing individuals familiar with the matter.
The Journal says that these firms are part of a growing trend of accounting firms that have taken private equity money since 2021.
A majority of these firms that have sold a stake to private equity have not merged with a peer to do so. They are incentivized by the funding boost. They need the extra capital so they can deal with problems including partner retirements, expensive technology advances and an accounting pipeline shortage that have been a burden on these firms' resources.
The prospective transaction, which might be announced in the coming weeks, would give the combined accounting and consulting firms a total of over $3 billion in annual revenue. This estimate is based on 2024 revenue and would make them the sixth largest accounting firm in the the country, ahead of BDO, CBIZ and Grant Thornton, the Journal says.
The combined firm would be led by senior leadership from both organizations, reports the Journal, citing individuals familiar with the matter.
According to the Journal, in 2024, Baker Tilly sold a stake to Hellman & Friedman and Valeas Capital Partners. The firm is the second largest accounting firm, behind Grant Thornton. to sell a stake to private equity, the Journal reports.
Baker Tilly said it has been transparent about its strategy to grow through strategic mergers. “We are continually exploring opportunities with respected firms that align with our growth expectations and will enhance our ability to serve the middle market,” the firm noted. Moss Adams stated that it does not comment on market speculation, the Journal reports.
A caveat is that deal is not yet final, and the talks could falter if another interested party prevails, the Journal says.
The potential transaction would provide Baker Tilly with a bigger presence on the U.S. West Coast while Moss Adams will have larger international operations.