Selling a CPA Firm to Private Equity in 2026:
What Owners Need to Know

How a private equity offer may be structured

An investor may propose buying a nonattest business while a separately licensed CPA firm continues to perform attest work. The documents must show which entity receives the investment and how the two businesses will operate. The New Jersey Society of CPAs reported more than 53 notable private equity transactions involving U.S. accounting firms between 2020 and mid-2025. That count does not establish what a buyer will offer your firm.

The buyer’s model can affect what happens to your firm after closing. In a platform strategy, an investor backs an anchor firm and supports further acquisitions under a larger organization. In an umbrella or network model, firms may retain local names and leadership while a parent provides shared services and acquisition capital. Ask which model the buyer uses and what decisions would remain with your partners.

Publicized transactions involving KKR and Crowe Advisory LLC, and New Mountain Capital and Grant Thornton Advisors, do not reveal what you would receive under an offer to your firm. If you use either deal for comparison, check the companies’ announcements for its parties, date, and structure rather than assuming the headline describes your proposed terms.

How a private equity deal is structured around attest work

An alternative practice structure may allow outside investment in nonattest services while keeping audits and other attest work in a separately licensed CPA firm. Whether that separation works for your firm requires a review of the proposed agreements and applicable rules. Agreements may connect the two entities. The AICPA describes an attest firm closely associated with an investor-owned nonattest entity.

The transaction documents must show how attest and nonattest operations would work in practice. If you compare the proposal with Kreischer Miller’s disclosed arrangement, first confirm the arrangement in Kreischer Miller’s own announcement; another firm’s structure does not establish the terms or permissibility of yours. Ask which entity would provide each service, employ your staff, contract with clients, and control decisions at the licensed firm. Separate entities on paper do not, by themselves, resolve licensing or auditor-independence questions.

State rules can change what the proposed structure permits. Illinois law sets ownership and active-participation requirements for licensed firms, including majority financial and voting control by qualifying licensees. Ask counsel to check the statutory definitions and any applicable exceptions against the proposed ownership documents. Texas has separate requirements for attest services and some nonattest entities under Texas Board Rule 501.81. Ask counsel to check whether the proposed attest firm needs a Texas license or qualifies for a practice privilege, and whether the nonattest entity has a notice obligation. Neither state’s rule approves a particular deal. Ask counsel to check the rules in every state relevant to your practice.

Auditor independence needs its own review under the rules applicable to your attest clients. If your firm audits an SEC registrant, that review must also address the SEC’s auditor-independence rule. The AICPA’s APS exposure draft proposes changes to existing ethics guidance. Check the PEEC project record for the status of the proposal when you evaluate an offer; an exposure draft is not a final rule. Ask qualified counsel and the relevant state boards to review the buyer’s proposed ownership, service agreements, and attest-client relationships before you rely on the structure in an offer.

Compare enterprise value, equity value, and cash at closing

Ask whether the headline price is enterprise value. That is the value assigned to the operating business before the deal’s adjustments for cash, debt, debt-like items, and working capital. Enterprise value does not tell you what you will receive at closing. If the buyer bases its price on adjusted EBITDA, meaning earnings before interest, taxes, depreciation, and amortization after agreed adjustments, use Salt Creek’s CPA valuation guide to examine that earnings figure. A valuation multiple alone does not describe the payment terms.

Equity value is the value attributable to the owners after agreed adjustments to enterprise value. In a cash-free, debt-free deal, the purchase agreement specifies how the parties treat cash and debt at closing. Do not assume you keep all cash or pay off debt separately from the price calculation. The purchase agreement determines how transferred cash, debt, debt-like liabilities, and any shortfall or surplus against the agreed working capital target change the price. If you retain the firm’s cash, do not count it again in the proceeds calculation. Kreischer Miller explains the purchase-price bridge.

Before signing a letter of intent, or LOI, ask the buyer to list the liabilities it proposes to deduct like debt. An LOI records proposed deal terms. Its exclusivity provisions may restrict discussions with other buyers. Accrued partner bonuses, unpaid taxes, deferred revenue, and earned but unused leave can become points of dispute. Ask how the buyer will set the working capital target, the agreed level of short-term operating assets minus short-term operating liabilities. Check whether a liability reduces the price twice, once through working capital and again as a debt-like item. Working capital adjustments can change the amount paid after closing.

Cash at closing is the amount paid to owners at closing after any agreed holdbacks and reinvestment, before considering each owner’s taxes. The buyer may place part of the price in escrow, require you to reinvest part in the new business, or promise payments later. Transaction expenses reduce your net proceeds, and taxes may reduce what you keep after closing. Have your tax advisor assess the proposed structure rather than treating the offer’s cash figure as an after-tax amount. Separate these forms of payment when comparing offers.

• An earnout pays you only if the firm meets agreed goals after closing. Ask which client-retention or financial measures apply, who controls staffing and client assignments, and what happens if the buyer changes how results are measured.
• Rollover equity gives you ownership in the business after the deal rather than cash now. Ask what ownership class you receive, whether future funding can dilute you, what information you can see, and when you might be able to sell.
• A seller note makes the buyer your borrower for part of the price. Ask when payments come due, what secures the note, and whether the buyer’s lenders get paid first.

Ask for a written schedule that separates cash at closing from the stated value of rollover equity, any seller note, and possible earnout payments. Show each payment date and condition, and do not add conditional amounts to guaranteed proceeds.

Compare a private equity sale, internal succession, and a regional-firm sale

The amount and timing of your proceeds can differ across a private equity sale, internal succession, and a regional-firm sale, even when proposed prices look similar. Use the table to compare payment timing, conditions, and your role after closing. These are possible terms, not standard terms for any buyer type; request written proposals before treating one path as more certain than another.

Internal succession lets you transfer ownership to people who already know the firm, but continuing cash flow may need to support staged payouts. Ask prospective successors how they will fund those payments if revenue falls or a major partner leaves. An agreed price provides little comfort without a credible payment plan.

A regional-firm sale may require you to stay through a client transition. Compare the proposed length and duties with the private equity offer rather than assuming either buyer will require less time. Ask who will serve your clients, which partners will stay, and what happens to later payments if clients leave. Across all three paths, compare the cash you can count on with the conditions attached to the rest.

What happens to you and your partners after closing

Your employment agreement may shape your daily role more than any ownership you retain. Before signing a letter of intent, ask who will set your compensation, client responsibilities, and decision-making authority. Have counsel review what happens if you leave, including any non-solicitation restrictions. Ask how the deal treats future promotions and obligations to retired partners. Hunton Andrews Kurth’s discussion of alternative practice structures offers context for reviewing the transaction documents.

Rollover equity gives you a stake in the business after closing, but your rights depend on the governing documents. Ask whether you will receive financial reports, hold a board seat, or have a vote on executive appointments, acquisitions, and future equity issuances. Find out who can require you to sell your stake and what happens if your employment ends. If part of the purchase price depends on client retention, ask who controls staffing and service changes that could affect whether clients stay.

The licensed attest firm also needs a separate review of who controls audits and other attest work. An investor’s proposed management rights should be tested against applicable independence and state licensing requirements before you accept them. The AICPA’s announcement about proposed alternative practice structure guidance identifies independence issues for review. It does not announce a final rule. Ask counsel which entities will employ your staff, serve each client, and hold the firm license, and how the buyer will preserve service continuity if that structure changes during review.

Financing, partner votes, regulatory review, and third-party consents can all be conditions to closing. Ask which conditions the buyer can waive and which must be satisfied before either side has to close. Ask whether the buyer’s financing is committed or still conditional, which partner votes and third-party approvals your firm needs, and what happens if a licensing or independence review requires a different structure. Set a clear end date for exclusivity and ask whether the buyer can extend it without your consent. Review approvals, employment terms, exclusivity, and closing conditions separately rather than assuming agreement on one resolves the others.

Client records need their own transfer plan. An article discussing AICPA ET 1.400.205 describes client-consent and notice issues when a firm transfers files. Have counsel check the current AICPA rule, the type of records involved, and applicable law before relying on a deemed-consent procedure. Federal tax rules separately permit some limited contact-list transfers and pre-sale review, while other disclosures may require prior written consent. Have counsel identify the records involved before sharing them. Permission to transfer a file does not require a client to hire the successor firm.

Questions to ask before you sign a letter of intent

• Will the buyer need financing to close, and what evidence of committed funds can you review before granting exclusivity?
• How will the buyer set the working capital target, and can you challenge the calculation after closing?
• Which liabilities will the buyer treat as debt-like items, and could any item also reduce the working capital adjustment?
• If an earnout depends on revenue or client retention, who controls staffing, pricing, client assignments, and the records used to calculate payment?
• What ownership class will you receive for any rollover equity, and what information, voting, dilution, repurchase, and sale rights come with it?
• How long will exclusivity last, what diligence milestones must the buyer meet, and when can you speak with other buyers again?
• Which partner votes and other approvals must occur before closing, and who is responsible for obtaining them?
• Which counsel and licensing specialists will review the proposed attest structure under applicable independence standards and each relevant state board’s requirements?

Check the valuation and choose an advisor

If buyers use different earnings adjustments, compare their offers on a consistent basis before comparing price. Salt Creek’s CPA valuation guide explains how to examine those assumptions; keep a separate schedule of cash at closing and conditional proceeds.

If you decide to approach other buyers, choose an advisor before granting exclusivity to the buyer already at the table. Salt Creek’s advisor comparison covers firms that work with accounting practice owners. Ask each candidate who will handle outreach and negotiations and how they will protect confidentiality. Review the engagement letter for any retainer, expenses, or other fees you could owe if no deal closes.

Discuss an inbound offer with Salt Creek Advisory

If you have an inbound private equity offer, Jack and Connor Pitts at Salt Creek Advisory can discuss its cash at closing, conditional proceeds, and post-close responsibilities with you confidentially. They can help you weigh internal succession, a regional-firm sale, and whether to approach other buyers before agreeing to exclusivity. One offer does not establish what another buyer would propose.

Jack and Connor remain directly involved throughout a Salt Creek engagement. For standard M&A engagements, Salt Creek charges no upfront retainer and earns a success fee if a transaction closes; review the engagement letter for the full fee terms.

Sources

• AICPA, “Ethics Rules Update for Alternative Practice Structures”, December 19, 2025.
• AICPA, “Alternative Practice Structures Exposure Draft”, February 20, 2026.
• Illinois General Assembly, “Public Accounting Act, Section 14.4”.
• Texas Secretary of State, “Adopted Rules, Board Rule 501.81”, July 24, 2026.
• SEC, “Auditor Independence, Rule 2-01”.
• NJCPA, “The Rapid Growth of Private Equity Investment in Public Accounting”, July 17, 2026.
• Kreischer Miller, “Understanding Debt and Debt-Like Items”.
• Auxo Capital Advisors, “Earnouts and Rollover Equity”.
• Hunton Andrews Kurth, “Alternative Practice Structure Considerations”, February 27, 2024.
• The CPA Journal, “Selling an Accounting Practice to Private Equity”, February 2026.
• AICPA, “PEEC Project Activity”.