What Is Your CPA Firm Worth in Today's 2026 M&A Market? A Complete Valuation Guide for CPA Owners
In 2026, the CPA firm M&A market has fully matured into a sophisticated, competitive arena.
Private equity (PE)-backed platforms, regional consolidators, and traditional CPA acquirers are aggressively pursuing acquisitions—but valuation criteria have evolved dramatically. Gone are the days when simple revenue multiples (often 0.8x–1.2x gross revenue) dominated. Today's buyers prioritize adjusted EBITDA multiples, earnings quality, scalability, and risk factors. Understanding these dynamics is essential if you're wondering, "How much is my CPA firm worth in 2026?" or planning an exit strategy.
This guide breaks down current CPA firm valuation trends, typical multiples, key adjustments, and what owners need to maximize value—whether selling to PE or a fellow CPA firm.
The Major Shift: Why EBITDA Now Drives CPA Firm Valuations in 2026
Historically, CPA firms sold based on gross revenue multiples, assuming strong client retention and partner continuity. In 2026, sophisticated buyers (especially PE-backed) focus on EBITDA for a clearer picture of sustainable cash flow.
EBITDA advantages include:
Normalizing owner perks and compensation
Adjusting for one-time or non-recurring expenses
Assessing scalability and operational efficiency
Enabling apples-to-apples comparisons across acquisitions
For sellers, this means valuation hinges on earnings quality rather than just top-line size. Firms with high margins, recurring revenue (e.g., advisory/CAS services), and low client concentration command premium CPA firm M&A multiples.
Current 2026 Valuation Multiples for CPA Firms
Multiples vary by buyer type, firm size, and quality. Here's a realistic snapshot based on recent market observations:
Private Equity-Backed Platforms (Preferred for Larger or Scalable Firms):
EBITDA Multiples: 3.5x–6.5x+ (higher for tech-enabled or specialized firms)
Typical Target EBITDA: $750K–$5M+
Deal Structure: Significant cash at close + 20%–40% equity rollover
Key Drivers for Higher Multiples: 20%–30%+ adjusted margins, strong recurring revenue, scalable staff, minimal owner dependence, clear growth path
Traditional CPA Firm Buyers (Common for Mid-Sized or Regional Fits):
EBITDA Multiples: 3.0x–4.5x (or revenue-equivalent economics)
Typical Target EBITDA: $300K–$1.5M+
Deal Structure: More earnouts, deferred payments, higher long-term cash focus
Key Drivers: Cultural fit, geographic synergy, partner transition, service compatibility
Note: While traditional revenue multiples (around 0.9x–1.35x) persist for smaller firms, larger or premium deals increasingly reference EBITDA. Firms with proprietary tech, AI tools, or strong advisory mixes can see outliers (e.g., 2x+ revenue in niche cases).
How Buyers Calculate Adjusted (Risk-Adjusted) EBITDA
Buyers don't use raw accounting EBITDA—they apply normalizations and discounts:
Common Add-Backs (Increase EBITDA):
Above-market owner salaries/benefits
Personal expenses run through the firm
One-time costs (legal, recruiting, consulting)
Temporary inefficiencies
Common Discounts (Decrease EBITDA):
Heavy reliance on partner billings
Understaffed or low utilization
Client concentration risks
Weak realization rates
Unplanned retirements without succession plans
Result: A risk-adjusted EBITDA that reflects true transferable value. Firms with clean financials, documented add-backs, and second-tier leadership often achieve the highest 2026 CPA firm valuation multiples.
EBITDA Margin Benchmarks That Matter in 2026
Margins are nearly as important as absolute earnings:
PE-backed buyers: Expect 20%–30%+ adjusted margins
Traditional buyers: 18%–25% (more flexible for strategic fits)
Lower margins reduce multiples, shift more to earnouts, or raise post-close performance hurdles. Boosting margins through efficiency, advisory services, or tech adoption directly lifts CPA firm worth.
Deal Structure Differences: Cash vs. Rollover Equity
PE Buyers Often Require:
20%–40% equity rollover for alignment
Partner involvement post-close (2–5+ years)
Upside potential but with illiquidity and execution risks
Traditional Buyers Typically Offer:
Higher cash components
Earnouts based on client retention
Simpler, lower-risk structures
Choose based on your risk tolerance and retirement timeline.
Must-Have Requirements to Attract Top Offers in 2026
Buyers now demand:
Clean, audited financials and clear compensation docs
Strong billing/realization metrics and retention history
Identified successors and staff depth
Defined transition plans
Willingness for post-close commitment
Firms lacking these can still sell—but expect lower multiples or heavier contingencies.
Internal Succession vs. External M&A: The 2026 Reality
Many owners prefer internal buyouts, but challenges like limited capital, risk aversion, and long payouts often make external sales more attractive. M&A provides liquidity, risk spread, and operational support—making it a proactive planning tool rather than a last resort.
Timing and Preparation: Don't Wait to Build Value
Value erodes from unplanned retirements, staff loss, margin squeeze, or delayed leadership development. Start with a confidential valuation assessment—even years ahead—to compare paths, prepare strategically, and retain leverage.
Ready to Discover Your CPA Firm's True Worth in 2026?
Market conditions remain favorable for well-positioned firms, with sustained PE interest and broader M&A momentum. A no-obligation review can reveal how PE platforms vs. traditional buyers might value your practice today—and what steps maximize your exit.
Ashley-Kincaid specializes in CPA firm M&A, helping owners nationwide with valuations, strategic sales, and growth through acquisitions (focusing on $500K–$15M revenue firms). Contact us today for a confidential discussion.