IPA Data Dive: M&A Is Becoming a BIG Deal

It’s not the number of M&A deals that commanded attention last year but the size of the firms involved.

The percentage of non-Big 4 firms reporting at least one merger or acquisition in the 2022 IPA National Practice Management Benchmarking Survey was actually down ­slightly – at 18% – from the 20% reported in both the 2021 and 2020 surveys. And the number of deals from one year to the next was almost even.

But when the size of the firms involved comes into focus, the year-to-year comparisons are much different. While not all participating firms chose to share data related to their M&A activities, those that did reported total revenue of more than $902 million added this past year, far outpacing the $485 million added via M&A in the 2021 survey. Further, this past year’s transactions (again, from those firms that chose to share their data) added 585 partners and nearly 4,900 staff members to the acquiring firms, blowing past the 2021 totals of 462 and 3,600, respectively.

Among the deals were several massive combinations of IPA 100 firms, as well as even more instances of IPA 100 firms folding in mid-sized peers from the IPA 200, 300, 400 and 500 (a trend that has continued in the first quarter of 2023). And while “megamergers” among the top firms in the profession haven’t exactly become commonplace just yet, they’re showing up in the headlines with more frequency than they have in the past – and shaking up the rankings with a host of new multimillion-dollar (and billion-dollar) players.

“The M&A frenzy continued in 2022, and while the number of M&A deals might be down a bit, the size of the firm deals has gone up dramatically,” remarks Allan Koltin, CEO of Koltin Consulting Group. “I believe this has a lot to do with private equity entering the marketplace and offering attractive deal economics, as well as much-needed capital for strategic growth and investment. Unfortunately, firms in the under-$5 million revenue range are finding that the list of potential acquirers for them has gone down, as the larger acquirers believe it takes just as much time to do a $15-million or larger deal as it does to do a deal with a $5-million or smaller firm.”


The 2023 INSIDE Public Accounting practice management survey is now underway! Join firms from across the profession in one of the largest benchmarking surveys of its kind. Contact [email protected] for more information.


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