Baker Tilly and Moss Adams merged this week in a deal that marks another shake-up for mid-market consulting firms and emphasizes the role being played by private equity in US accounting.
The two firms, which are both in the tier below the Big Four, have a combined annual revenue of over $3 billion. By joining forces, they’ve catapulted themselves above BDO, Grant Thornton US, and CLA to become the 6th largest accounting firm by revenue in the US.
The move brings together 11,500 employees into one firm that will keep the Baker Tilly name and be an independent member firm in the Baker Tilly International network.
In a joint interview, the two CEOs of the merged firms told Business Insider that the move is mutually strategic and will help them navigate the challenges facing the mid-market.
“We just added a bunch of arrows into our quiver,” said Jeff Ferro, CEO of Baker Tilly.
The deal also offers an insight into how private equity is reshaping the industry in the US.
In 2024, Baker Tilly sold a stake to the private investment groups Hellman & Friedman (H&F) and Valeas, in the second-largest deal in the sector at the time.
Baker Tilly is now, thanks to the merger, the largest firm in the industry to be partly owned by private-equity investors.
It’s a trend that is redefining the culture and business model of traditional accounting firms.
Firms have typically paid out profits to equity partners, who also get a vote on how they are run. Private equity offers an influx of capital to help firms evolve their technology and data, but requires firms to divest the control historically promised to partners, shaking up their culture.
Ferro told BI that Baker Tilly’s strategic plan had been to grow through acquisition, and was a key part of what H&F bought into when they signed the deal. H&F will also make a “meaningful additional strategic investment in the business” as part of this transaction.
“Our chances of executing our strategy were good, and now I think they’re great,” said Ferro.
A merger that expands the firms’ reach
Combining firms also created strategic advances in geographic reach — Moss Adams is West Coast-focused, while Baker Tilly mostly covers the East, central, and has some international clients. The two firms bring specific industry strengths to the table and different tools and service capabilities to offer clients, Ferro said.
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“I see us being a $6 billion revenue organization in five years,” Ferro said, which would mean doubling their current combined revenues.
“It’s quite a win,” agreed Eric Miles, the former CEO of Moss Adams, who will take over from Ferro as CEO of Baker Tilly when Ferro retires at the end of the year.
The needs of the mid-market client base are changing, and they require more scale and breadth of services than they used to, he said.
At the same time, the firms themselves are seeing increasing demand for true fixed costs like training and development, and AI. Those kinds of pressures require large organizations to scale to be competitive, he said.
Neither firm had to do the merger, Miles said, “But we had this strategic lens on it, saying, ‘how can we be stronger? What’s going to be required to be a leading competitive firm in the future?'”
“The partnership with Baker-Tilly helped us meet all those long-term strategic objectives, which helps us not only deal with these forces, but get out in front and lead in the market,” Miles said.
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