Accountancy M&A remains strong, but buyers are becoming more selective. Julia Whistler of Foulger Underwood explains why quality firms are attracting premium valuations while others face greater scrutiny.
The UK accountancy M&A market remains “hugely active” with a “really strong appetite” for acquisitions but buyers are now pickier and expectations are rising across the board.
That’s the conclusion of Julia Whistler of Foulger Underwood, industry expert in mergers and acquisitions (M&A), who spoke to TaxCalc TV for our recent webinar. Watch in full here.
Julia says many deals are still being worked on and describes the overall picture as “very consolidating at the moment”.
But beneath that activity, a shift is underway in terms of what buyers are looking for.
Julia explains: “Many deals are becoming more specific in requirements. They're very value driven.”
Buyers focusing on quality over quantity
According to Julia, though the headline numbers look strong, buyers are taking a more disciplined approach.
“Deal volumes are higher than pre-2022 and appetite remains really, really strong,” she says.
“But the buyers are mainly focusing on quality over quantity now. There are fewer deals, but the deals that are being done are larger. Quality firms are moving fast, and weaker firms are stalling at the start line a little bit.”
For many firms, that means strong revenues and defensible client bases are more important than ever.
“Strong recurring revenue models are attracting premium valuations. Weaker firms with tech gaps or compliance issues are struggling potentially to get some buyer traction.”
Watch the webinar in full below.
Consolidation continues across firms of all sizes
Consolidation remains one of the defining features of the market, with activity spreading beyond mid-tier firms.
“Consolidation in the accounting sector still remains really, really hot,” says Julia.
“Consolidation is happening at every level now from mid-tier all the way down to micro. There's an increasing amount of activity amongst the smaller accountancy practices in the marketplace. Consolidators are showing more interest in this size now.”
Familiar pressures are behind this, she says, including succession planning, talent shortages, the rising regulatory burden and “the need for digital transformation”.
Tech and AI reshape valuation
Technology is increasingly influencing both buyer interest and valuation.
“AI-ready, AI-resilient business models are going to command higher multiples,” Julia explains.
More broadly, the focus has shifted from simply having systems in place to how well they are used.
“It’s not about tech anymore… it’s about tech maturity,” she says, noting that firms without it may face a drop-off in the price they can attract.
She sees that scrutiny extending into due diligence, particularly on “compliance and AML file quality”, which she predicts is “going to be much deeper and much slower”.
A more demanding market for buyers and sellers
The overall picture is one of a market still full of opportunity — but harder to navigate.
As Julia puts it, the fundamentals have not changed, but the way deals are judged has.
“Activity is up, but buyers are being choosy.”
The result is a more selective, more competitive market — where the strongest firms continue to attract attention, and everything else faces increasing scrutiny.
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