Baker Tilly in talks to buy US rival as accounting dealmaking heats up

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Baker Tilly is in talks to buy US rival Moss Adams in a more than $2bn deal that would vault it over Grant Thornton and BDO to become the country’s sixth-largest accounting firm by revenue, said people familiar with the matter.

The negotiations come barely a year after Chicago-based Baker Tilly sold a majority stake to a private equity consortium, vowing to turbocharge acquisitions and boost its share of the fast-consolidating market for accounting and consulting services.

With the addition of Seattle-based Moss Adams, the firm will have more than $3bn in annual revenues. Outside of the Big Four accountancies, only RSM would be bigger in the US.

The combination is being pitched as the creation of a “powerhouse for the middle market”, said one person familiar with the deal, which they cautioned is yet to be finalised.

A sale promises windfalls to the more than 400 partners of Moss Adams as private equity profoundly reshapes the US accounting landscape. More than one-third of the top 30 firms have abandoned their historic partnership model and taken outside capital in the past four years. Baker Tilly agreed to sell a majority stake to a consortium led by Hellman & Friedman in February 2024.

Private equity buyers have been attracted by the stable revenues from audit and tax work and by the opportunity to turn the largest players into “platform” companies that can buy their smaller rivals, wringing savings from consolidation.

The jolt of dealmaking has left mid-tier partnerships having to decide if there is room to become another platform company, chasing acquisitions at what are now historically high valuations, or to sell out to a rival.

Baker Tilly and Moss Adams are the 11th and 12th largest US accounting firms by revenue, according to Accounting Today.

Baker Tilly was pushed out of the top 10 last year when CBiz, the only publicly listed US accounting firm, acquired Marcum for $2.3bn. Marcum had annual revenues of $1.3bn in 2023, roughly equal to Moss Adams.

As well as additional scale in the US, the combination with Baker Tilly will give Moss Adams access to the Chicago-based group’s global network of sister firms, which together have operations in 143 territories. Small and medium-sized businesses are increasingly international in their operations and US accounting firms have been trying to strengthen their global networks so they can offer cross-border services more seamlessly.

Moss Adams declined to comment.

Baker Tilly said: “We have been transparent about our strategy to grow our organisation through strategic mergers” and are “continually exploring opportunities with respected firms that align with our growth expectations”.