Australian Accounting Firm Consolidation: What the 2000s Aggregations Teach Us About Today's Buyers
The last time this happened, four major aggregators tried to roll up the profession. Three collapsed. One survived — and not in its original form.
We are in the middle of the largest generational transfer of equity in Australian accounting firms since the late 1990s. The last time the profession looked like this, four publicly listed aggregators were racing to assemble one hundred million dollars of turnover each. Most of them no longer exist. The question worth asking now is not whether this consolidation wave will end — it will — but what the firms going through it should learn from the last one.
- The current consolidation activity in Australian accounting firms is the largest equity transfer the profession has seen in 25 years.
- Of the four major aggregators that drove the late-1990s wave — Stockford, Harts Australasia, Garrisons and WHK — three collapsed entirely and the fourth survived only through reinvention and eventual private acquisition.
- The firms that paid the highest prices for goodwill last cycle were also the firms that failed first, because they could not sustain those valuations under public-market pressure.
- If you are a vendor, current pricing conditions are unlikely to hold beyond the next two to three years before activity slows and valuations normalise.
- If you are being offered equity in a firm, the relevant question is not what the practice sold for last time but what the underlying earnings will support going forward.
I have been valuing accounting practices for thirty years, and Rob Knights & Co has been doing this work for fifty. I did many of the valuations for firms going into the late-1990s consolidations, so I watched the transactions go in and I watched what happened afterwards. The pattern unfolding now is not identical to that period — it never is. But the underlying dynamics are similar enough to be worth setting out plainly.
In 2025 and 2026 we are seeing private equity and well-funded acquirers building hub-and-spoke networks of accounting firms. Victorian-backed buyers are heading north into Queensland. Established mid-tier firms are making bolt-on acquisitions to expand into adjacent regions. The activity is real, and in some cases the prices being paid are extremely strong.
What is worth examining is what we know from the last cycle about how this kind of activity tends to end.
What actually happened between 1998 and 2002
From the late 1990s through to around 2001, four publicly listed groups were active acquirers of Australian accounting practices: Stockford Limited, Harts Australasia, Garrisons Accounting Group, and the WHK Group (then known as Investor Group). Each was racing to assemble roughly a hundred million dollars in combined turnover to support a listed equity story.
The valuations that went into those acquisitions were, in many cases, well above what an independent valuer would have signed off on. We did many of the independent valuations for firms going into these deals at the time, and the offer prices were frequently double, occasionally triple, the figures we put forward.
The firms that paid the most for goodwill were the firms that could least afford to. The maths only worked if the rolled-up entity could keep growing — and the moment growth slowed, the model broke.
The structural problem was straightforward. Once you have paid above-independent-valuation prices for a roll-up of firms, you have to deliver continuous earnings growth to justify the listed share price. That created head office pressure around debtor days, billing methodologies, charge-out rates and partner behaviour. Centralised systems were imposed on practices that had operated independently for decades. Three-year restraint clauses also masked the reality that many original partners had no intention of staying beyond the restraint period.
By 2002 to 2003, Stockford, Harts and Garrisons had collapsed or been wound up. WHK Group continued and eventually became Crowe Horwath, which itself was acquired by Findex in 2015 with private equity backing and delisted from the ASX. Of the four, only one navigated through — and not as the entity it started out as.
Why this looks similar — and where it differs
The current wave is being driven by different actors. The capital is not coming from public-market float proceeds. It is coming from private equity funds, from well-capitalised mid-tier firms, and from a small number of listed groups like Kelly Partners. Kelly Partners now appears to be focusing its acquisitions in the United States and United Kingdom rather than continuing to expand domestically.
The motivation is also slightly different. The 1990s wave was about scale for its own sake — get the turnover up, get to listing, then figure out the operating model. The current wave is more strategic, with buyers identifying specific geographic gaps, service-line expansions or partner-succession opportunities. Hub-and-spoke models targeting roughly ten million dollars in turnover per hub are common. Victorian-headquartered acquirers are particularly active in Queensland.
The similarities sit underneath all of that. A large cohort of baby-boomer accounting principals are looking to exit at roughly the same time. That creates a temporary imbalance — more sellers than the historical buyer pool can absorb — which has brought new capital into the market to fill the gap. The same dynamic was in play 25 years ago, just with different exit destinations.
The pricing pressure is similar too. When there is more capital chasing acquisitions than there are quality practices on offer, prices rise. Some of the deals being done at the moment are priced above what the underlying earnings will comfortably support over the medium term. Not all of them — there are sensible, well-priced transactions happening every month. But there are also deals being done at numbers that look familiar.
If you are looking to maximise the value of your goodwill, you want to be selling sooner rather than later. The current pricing environment will not hold indefinitely.
The "I bought in at X cents in the dollar 30 years ago" mistake
The single most common misconception we see from vendors is the belief that the equity value of their practice should be the same today as the figure they bought in at decades ago. No other asset class works that way. Accounting practice valuations are derived from current and future maintainable earnings, the quality and stability of the client base, the calibre of the team underneath the principals, and the comparable transactions in the current market. None of those are static, and none of them have any necessary relationship to a historical buy-in figure.
Two readers, two different decisions
The implications of the current cycle depend entirely on which side of the transaction you are on. The same market conditions look very different to a vendor preparing to sell compared to someone being offered equity as part of an internal succession.
You are likely in the strongest pricing window of the next decade
Practice values are elevated by the volume of capital currently chasing acquisitions. That capital will not stay at this level indefinitely. When the market normalises, valuations will too. If your succession plan involves an external sale, the conditions over the next two to three years are worth taking seriously.
The most common error in this scenario is over-playing your hand. We recently saw a highly profitable practice receive a fair offer, reject it on the basis of a higher independent valuation, and then watch the buyer walk. The right valuation is the one that closes a transaction with a credit-worthy buyer, not the highest number on a piece of paper.
The price someone else paid is not the price you should pay
We are seeing a real risk of new equity partners overpaying because the figure being put to them is benchmarked against what an external buyer is willing to pay for the whole firm. An external acquirer is buying scale, geographic expansion and a roll-up story. A new internal partner is buying a percentage of future maintainable earnings.
The right valuation for an internal equity exchange is generally lower — sometimes meaningfully lower — than the price the same practice would sell for in the open market. Conflating the two has caused real damage to incoming partners in the past, and we are seeing it again now.
The conversations I am having with practitioners in 2026 break into those two groups, and the advice for each is genuinely different. There is no version of the current market where both vendors and incoming equity partners are being offered fair terms by default. One side is benefiting from the conditions; the other side needs to read the conditions carefully.
If this article describes your situation
- Get an independent valuation before you have any serious conversation. Whether you are selling, being offered equity, or considering an internal succession, the numbers need to come from someone who is not party to the transaction.
- Stress-test the price against current earnings, not against historical figures or transaction comparables you can't verify. What an aggregator paid for a different firm in a different region is not a benchmark for your situation.
- Understand who the buyer actually is and what they need from the transaction. A private-equity-backed acquirer, a mid-tier hub builder and an internal partner are buying three different things, even if the practice on offer is the same.
- If you are within five years of wanting to exit, start planning now. The window for current pricing will close. The firms that exit well are the firms that planned for the exit before they needed to.
Australian Accounting Firm Consolidation
Is the current accounting firm consolidation wave going to end the same way as the 1990s one did?
Not necessarily in the same way. The capital is private rather than public, which removes the listed-equity pressure that broke Stockford, Harts and Garrisons. But the underlying dynamic of capital chasing a finite pool of quality practices and bidding prices above what the earnings will support is the same. We expect activity to remain strong for another two to three years before normalising. Some of the current deals will work out very well; some will not.
How long will current Australian accounting practice valuations stay at this level?
Most likely another two to three years before activity slows. Practices will continue to sell after that — the market will not stop — but the elevated prices we are currently seeing are driven by an unusual concentration of capital and demand. When that normalises, prices will too. Vendors with a planned exit within the next five years should treat the current window seriously.
Why did Stockford, Harts and Garrisons collapse?
The fundamental issue was that they paid acquisition prices substantially above independent valuations, then needed continuous earnings growth to support the listed share price. That created head-office pressure on local practices around debtors, billing and operations that the underlying partner cohort did not accept. Three-year restraint clauses masked the exit intentions of original partners, who left in significant numbers once the restraints expired. The model required everything to keep moving forward — and accounting firm earnings are not built that way.
Should I sell my accounting practice now or wait?
If you are planning to exit within the next five years, the next two to three years is likely the strongest pricing window. If your timeline is longer than that, there is no urgency — practices will continue to sell well after this cycle ends. The decision is not about timing the market perfectly. It is about whether your succession plan aligns with where the market is right now.
How is an internal equity valuation different from a sale valuation?
An internal equity valuation is about what a percentage of the practice is worth to an incoming partner who will continue to work in the business and share in future earnings. A sale valuation is about what a third-party buyer is willing to pay to acquire the whole practice, often for strategic reasons that include scale, geography and roll-up potential. The two figures should not be the same, and using one to price the other is one of the most common mistakes we see.
What kinds of buyers are most active in the current Australian accounting market?
Three groups. Private-equity-backed consolidators building national or regional networks. Established mid-tier firms making strategic bolt-on acquisitions, often configured as hub-and-spoke. And listed groups like Kelly Partners, although Kelly Partners now appears to be focused on the United States and United Kingdom rather than further Australian expansion. Each has different motivations, different price tolerances and different post-acquisition expectations.
The right valuation comes before the conversation, not after it
Whether you are preparing to sell, considering an internal succession, or being offered equity in a practice, the foundation of every good outcome is an independent view of what the practice is actually worth. Rob Knights & Co has been valuing Australian accounting, financial planning and legal practices for fifty years, with more than 11,000 valuations completed.
What practices are selling for, and what is moving the numbers
Michelle’s monthly note on practice valuations, buyer activity and the conditions we are seeing across accounting, financial planning and legal firms.
