Baker Tilly Advisory Group, which has joined forces with Moss Adams, is working to establish a powerful national brand for its clients in the middle market. Bloomberg Law reports that Baker Tilly is leveraging private equity investment to broaden its service offerings while upgrading its technology.
The firms closed a $7 billion merger on June 2, creating the sixth-largest accounting firm in the country and giving the new Baker Tilly both scale and reach to provide a diversified offering of in-demand services, the combined firm’s top leaders stated in a Bloomberg Tax interview.
According to Bloomberg Law, this transaction could be part of a growing trend. Mergers and roll-ups are set to shake up the mid-tier accounting space with firms competing for a bigger market share while increasing their AI investments.
“Our clients need a nationwide, multi-industry, multi-disciplinary firm and we would say designed for the mid-market,” noted Eric Miles, ex-CEO of Moss Adams. In January, Adams will be the head of the merged firm under the Baker Tilly name, Bloomberg Law reports.
Meanwhile, CEO Jeff Ferro will lead Baker Tilly until he retires later in 2025. Both leaders told Bloomberg Tax about what they are aiming for in the 3.5 billion revenue firm and its over 11,000-person workforce.
The merger with Baker Tilly—which was part of a 2024 private equity deal—gave Moss Adams a way to stay competitive in the evolving mid-tier marketplace, Miles stated.
Baker Tilly’s tax practice and its accounting outsourcing services are rife with opportunities to expand, the leaders stated, Bloomberg Law reports. The firm’s listed company practice—covering advisory work and auditing—will stay a core service, the leaders stated.
“We need to be strong in this space to be a relevant CPA firm,” Miles stated. “We view it as an important part of our future strategy.”
In the next year, the merged firm will focus on combining its legacy technology systems and creating a solid foundation for AI investments going forward, Miles noted.
Moss Adams brings with it a portfolio of close to 100 U.S.-listed audit clients—over double Baker Tilly’s public company audit practice, the two leaders stated. Combined, the firm will be among the 10 biggest auditors of public firms in the country, resulting in annual regulatory scrutiny, Bloomberg Law reports.
Private equity’s investment in the accounting profession has ignited worries that firms would leave auditing, specifically for listed clients, which have stringent independence requirements along with other compliance impediments. Firms like Baker Tilly, as part of a portfolio company, can also experience possible conflicts of interest.
However, for Baker Tilly, the outside capital offers resources for the firm to broaden its geographic reach while investing in new service offerings, recruitment and technology, Ferro noted.
“We’ve got rocket fuel from private equity to be able to fund all that,” he noted. “It’s all part of the plan.”