Baker Tilly in talks to merge with Moss Adams

Hey, remember when we thought the CBIZ-Marcum merger was big?

An even larger deal between two accounting firms may be on the horizon. The Wall Street Journal reports that Baker Tilly, the 11th-largest accounting firm in the US, and Moss Adams, the 12th-largest, are in talks to complete a merger. If the deal goes through, the combined entity would be the 6th-largest accounting firm in the US, with annual revenues of more than $3 billion.

Last February, Baker Tilly joined the growing trend of taking on private equity investment, selling a stake in itself to PE funds Hellman & Friedman and Valeas Capital Partners. Since then, it’s been on an acquisition spree, scooping up at least six smaller firms. It has plans to increase its US revenue as much as threefold by 2030, Jere Shawver, the CEO of its audit practice, said last year.

Broker Allan Koltin, who has worked on many accounting firm deals involving private equity, praised the potential merger, telling CPA Practice Advisor that “both firms will bring over their unique areas of industry specialization and service line expertise, which should provide robust organic growth opportunities to the combined firm.”

The deal would make the combined firm the largest non-Big Four firm in the West, Koltin said. Both firms have a sizeable footprint in western states: Moss Adams has 15 offices in California, eight in Washington state, and seven in Arizona, Colorado, Oregon, New Mexico, and Utah, while Baker Tilly has nine offices in California and five in Arizona, Colorado, and Washington state.

In an email to staff, CPA Practice Advisor reported, Moss Adams CEO Eric Miles neither confirmed nor denied that a deal was in the works, calling the Wall Street Journal article the “result of…mounting rumors and speculation.” Another source, however, told CPA Practice Advisor the deal was likely to be announced between June 1 and July 1.