10 of the top 20 CPA firms are backed by private equity

Ten of the nation’s top 20 largest accounting firms will soon be owned by private equity.

In recent weeks Crowe (No. 12) and Eide Bailly (No. 18) both announced deals with PE funds, the Wall Street Journal reported; Crowe sold a majority stake to KKR, in a deal worth around $3 billion, while Eide Bailly, valued at around $1.8 billion, sold a majority share to Reverence Capital Partners. Both deals are expected to close in the third quarter.

After the deals are finalized, both Crowe and Eide Bailley will adopt alternative practice structures, separating their audit and attest services from their tax, consulting, and other business lines to comply with independence rules, according to the Wall Street Journal. The nonaudit businesses are the ones receiving the PE investments.

Both firms said they were taking PE money in order to spur growth. Crowe said it wanted to do more acquisitions, while Eide Bailly COO Andy Spillum told the Wall Street Journal that the firm planned to double its $840 million revenue in the next three to four years. And both firms wanted more capital to invest in AI.

“The technology changes are going to make, for a short period of time, things more confusing,” Spillum said. “Having a capital sponsor like this, with the ability to navigate and get us to the right spot quicker so we can help our clients quicker, was probably the No. 1 driver.”