Ask ten practitioners what their firm is worth and most will still answer in the old currency: a multiple of fees. It’s an understandable instinct, it’s how practices have traded for decades. It’s also, for a growing number of firms, the wrong answer. Irish accountancy is consolidating quickly, and the basis on which a practice gets priced now depends heavily on its size, shape and readiness.
Two markets, not one
The first thing to understand is that there isn’t a single market for accounting practices, there are two, and they run on different logic. Sub-scale books, generally under about €500k in fee income, still trade on a multiple of gross recurring fees, typically 0.6x to 1.1x, paid out over two to three years as the acquirer collects the billings. Above that threshold, the market has shifted: practices are increasingly priced as proper EBITDA deals, on a cash-free, debt-free basis, with multiples ranging from 3x up to 9x.
Which market you’re in isn’t a matter of preference. It’s a function of scale, structure and how the buyer can realistically integrate what they’re acquiring, and it determines almost everything else about how a sale process should be run.
Why identical EBITDA can mean very different prices
Within the EBITDA market, firms sit on a tier ladder, sub-scale, scaled compliance, scaled advisory-led, and platform-grade, and where a firm lands on that ladder matters more than almost any other single factor. Two practices with the same adjusted EBITDA can be several multiple points apart, purely because of what sits underneath the number.
Six things move a firm up or down within its tier: the quality of recurring fees, sector niche, depth of the partner bench, the proportion of advisory versus compliance work, the strength of systems and automation, and the underlying quality of the book itself. The thread running through all six is dependency. A practice that leans too heavily on one partner, one sector or one client is a practice buyers discount, regardless of how healthy the headline numbers look.
The preparation gap
The firms that consistently price at the top of their range share one trait: they started preparing 18 to 36 months before going to market. That’s the time it takes to clean up accounts, bring down client concentration, and build a partner bench that can genuinely survive a transaction, as opposed to one that walks the moment the ink is dry. Firms that skip this stage don’t fail to sell; they simply sell for less than they were capable of.
The deal-killer nobody budgets for
Confidentiality is, in our experience, the most common reason a good process turns into a bad outcome and it’s rarely treated with the seriousness it deserves. A practice sale is uniquely exposed to leaks, because clients, staff and competitors all have a direct relationship with the asset being sold. In one case, a teaser that was technically anonymised but still identifiable led a key client to a competitor within days. The result: €180k of fees gone, and a deal that ultimately completed at a 0.7x multiple instead of the 1.0x originally on the table before anything had even been signed.
The number on the page isn’t the number you’ll bank
Even once a price is agreed, it rarely arrives as a single cash sum. Upfront cash typically makes up only 50% to 75% of total consideration; the balance is spread across deferred consideration, earn-outs and rollover equity, each carrying a different risk profile. An earn-out built around targets the buyer effectively controls, for instance, can leave a seller with a headline figure they never actually collect. Reading the structure behind the price is every bit as important as negotiating the price itself.
Where this leaves practitioners
Whichever stage you’re at; a decade from any transaction, or actively fielding approaches, the same discipline applies: understand which market your firm sits in, know what’s genuinely driving your multiple, and start the preparation work long before you think you need to. The firms that come out ahead aren’t necessarily the largest. They’re the ones that went into the conversation already knowing what they were worth.
If you’re weighing up the future of your practice, a sale, admitting a partner, or simply getting a clear-eyed view of where you stand, Tom Murray the team at Friel Stafford are happy to talk it through. Simply get in touch.