Deal Lessons from 2025: What CPA Firms Must Know for 2026

2025 was an ultra-active year for CPA firm M&A—with PE playing an ever-expanding role. What we’ve learned from years of strategic advising and facilitating transactions is that there are aspects of deal-making that stay consistent; others reflect the times we live in.

Here are 5 takeaways from 2025 that will be important to apply in 2026:

1. Employee retention is critical. Acquirers of all sizes and types are focused on staff levels and leadership skills. Few acquirers have the immediate capacity to handle staff turnover and transitioning of account oversight. Increasingly, acquirers are requiring a percentage of personnel agree to join the new firm.

   
   

   While PE firms can pay for new talent, they are competing with others that also have finances. Prepare for your top staff to be introduced early in the M&A process. Partner compensation will become even more relevant.

   
   

2. Profitability is universal. Profitability was the leading filter in 2025 and will continue. EBITDA is the favorite factor for PE; gross profit and partner earnings are favorites for more traditional buyers.

   
   

   Successors will flinch at reengineering a firm to generate profitability. They will seek an already profitable firm and then look to increase profit through innovation and adding services. Spend time on pre- and post-transaction profit analytics and conversations.

   
   

3. Complexities and nuance are routine. Newer acquirers—especially PE—bring different structures, more due diligence, and complicated documentation to the mix. Sellers need to work with attorneys well versed in not just M&A for professional service firms but PE and securities, as well.

   
   

   Conventional buyers are adding new elements to compete with non-traditional buyers. Seminars will only scratch the surface for readiness. Do your homework—and seek guidance from those who’ve been through the process before.

   
   

4. Buyer behavior is changing. Buyers are changing to more effectively compete with PE. Traditional deal pricing is becoming similar to PE structures. Compensation is morphing. Many buyers are now looking at smaller transactions that may not be in PE’s wheelhouse.

   
   

5. Sellers are becoming distracted. News of M&A activity is loud and constant. There is increased outreach to sellers from brokers pitching options that may not be viable.

   
   

   Sellers with PE stars in their eyes are distracted from making more realistic, sensible deals—and often lose out. Sellers focused on their strategic M&A goals will be more successful finding viable partners—whether PE or not.

As 2026 evolves, there will certainly be new matters that will affect M&A. But taking these lessons learned from 2025 to heart will put your firm in a better spot this new year.