Charles Esther
In a significant move reshaping the mid-market accounting industry, Baker Tilly and Moss Adams have merged to create the sixth-largest advisory CPA firm in the United States. This merger not only expands their combined reach but also highlights the growing influence of private equity in the accounting sector.
Combining Strengths: A New Powerhouse Emerges
The newly merged firm now boasts more than $3 billion in annual revenue and a workforce of approximately 11,500 employees. This growth propels Baker Tilly ahead of established firms like BDO, Grant Thornton US, and CLA in terms of revenue, solidifying its position as a major player in the US accounting market.
Despite joining forces, the merged company will continue to operate under the Baker Tilly name and remain an independent member of the Baker Tilly International network.
Private Equity’s Increasing Role in Accounting
Private equity has become a key driver behind the merger. Earlier in 2024, Baker Tilly sold a stake to investment groups Hellman & Friedman (H&F) and Valeas, marking one of the largest private equity deals in the sector at the time. This capital injection aims to accelerate the firm’s technological innovation and growth initiatives.
Jeff Ferro, CEO of Baker Tilly, described the deal as “adding a bunch of arrows into our quiver,” emphasizing the strategic value of private equity’s involvement. However, this partnership also signals a cultural shift in the traditionally partner-led accounting firms, as private equity ownership demands greater control and a focus on scalable growth.
Geographic and Service Complementarity
Moss Adams brings a strong West Coast presence, while Baker Tilly covers the East Coast, central US, and international markets. The merger enhances the firms’ geographic coverage, allowing them to serve a broader client base more effectively.
Additionally, both firms bring unique industry expertise and service capabilities, creating a diverse portfolio of solutions tailored to evolving mid-market client needs.
Looking Ahead: Ambitious Growth Plans
The leadership of the combined firm is optimistic about future prospects. Jeff Ferro envisions the firm doubling its revenue to $6 billion within five years, driven by continued acquisitions and organic growth.
Eric Miles, the former CEO of Moss Adams and incoming CEO of Baker Tilly, emphasized the necessity of scale and innovation to meet increasing client demands. “The needs of mid-market clients are changing rapidly,” Miles said, noting the growing importance of fixed-cost services like training and AI-powered solutions.
Strategic, Not Inevitable
Miles highlighted that the merger was not a reactionary move but a carefully considered strategic decision. “Neither firm had to do the merger,” he said. “But through a strategic lens, we asked: How can we be stronger and remain competitive in the future?”
This thoughtful approach reflects a broader trend in the mid-market advisory space, where firms are proactively seeking partnerships to navigate changing client expectations and competitive pressures.
