In short
Private equity's entry into accounting has broken the old one-times-revenue convention for firms with real scale. PE-backed platforms typically pay more than internal succession for firms with advisory revenue, staff depth and partners willing to stay. What they require in exchange is commitment: multi-year employment, rolled equity and a growth plan.
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For decades firms changed hands through internal succession at roughly one times annual revenue, paid out over years from future earnings. Platforms buy on EBITDA, commonly around 5.5–8.5x for firms with roughly $1M+ of EBITDA and 10–15x for platform-scale deals, and pay a large share in cash at closing. For a firm of genuine size with advisory mix, that is a materially different outcome than perpetuation, and it is why so many partner groups are at least taking the meeting.
Expect to stay. Platforms are buying a client base that depends on partner relationships, so they underwrite continuity and structure the deal to secure it. Expect a rollover equity component, expect performance expectations, and expect standardization of technology and process. Ask precisely how the earn-out is measured, who controls decisions affecting it, and what happens to your staff and your compensation model.
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If your firm is compliance-heavy without meaningful advisory revenue, if the partner group does not want to stay several more years, or if culture matters more to you than the size of the cheque, succession remains a legitimate answer. The mistake is choosing it by default without ever pricing the alternative. Knowing both numbers is what makes the decision genuine.
Smaller practices still commonly sell near 1x annual revenue (about 1.5–2.5x seller’s discretionary earnings (SDE)). Firms with roughly $1M+ of EBITDA, advisory mix and staff depth trade around 5.5–8.5x EBITDA, and private-equity platform deals 10–15x. These are market ranges, not a quote or a guarantee. The presence of PE-backed platforms has widened the gap between those two outcomes considerably.
With a platform buyer, almost always, and usually for several years. They are buying client relationships that live with the partners, so continuity is central to the deal. If a clean exit is your priority, internal succession or a merger with a regional firm may fit better even at a lower price.
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General information only, researched and drafted with AI assistance — not legal, tax, financial or valuation advice. See our terms.