Baker Tilly and Moss Adams Merge in $7 Billion Deal: A New Leader in Middle-Market Accounting?

The accounting industry’s consolidation wave has reached a new milestone with the proposed $7 billion merger of Baker Tilly US and Moss Adams, two of the largest U.S. advisory firms outside the “Big Four.” If finalized in early June 2025, the deal will create the sixth-largest CPA firm in the U.S., with a focus on middle-market businesses, private equity-backed growth, and a geographic footprint stretching across 143 territories. But how does this merger stack up as an investment opportunity, and what challenges lie ahead?

The Strategic Rationale: Geography, Scale, and Private Equity Muscle

The merger aims to combine Baker Tilly’s coast-to-coast presence and global network—part of the 43,500-professional Baker Tilly International alliance—with Moss Adams’ deep West Coast expertise and Praxity global alliance ties. Together, they will serve clients in industries like technology, healthcare, and private equity, leveraging a combined $3.06 billion in 2024 revenue ($1.8 billion for Baker Tilly, $1.26 billion for Moss Adams).

The deal is also fueled by private equity capital. Hellman & Friedman (H&F) and Valeas Capital Partners, which acquired a majority stake in Baker Tilly in 2024, are increasing their investments to support the merger. Blake Kleinman of H&F called it a step toward building a “destination of choice” for talent and clients, signaling confidence in the firm’s ability to compete with rivals like BDO and RSM.

Leadership and Culture: A Smooth Transition?

The merger’s success hinges on its leadership transition. Baker Tilly CEO Jeff Ferro will remain until his retirement in late 2025, after which Moss Adams CEO Eric Miles will take the helm. Ferro emphasized the merger’s “people-first culture,” while Miles highlighted the combined firm’s ability to “magnify opportunities for growth and innovation.” Both firms have long prioritized mentorship and specialized resources for professionals, a strategy critical to retaining talent in a competitive industry.

Valuation and Risks: $7 Billion for What?

The $7 billion valuation—reported by Reuters but not explicitly stated in the press release—reflects more than just revenue. It accounts for synergies like expanded geographic reach, shared technology investments, and the elimination of redundancies. However, the figure contrasts with a $2 billion+ valuation cited in earlier merger rumors, underscoring the complexity of valuing partnership-driven firms.

Risks remain. Regulatory approvals are pending, and the accounting sector faces headwinds like partner retirements and tech-driven efficiency demands. Competitors like KPMG and EY are also expanding their middle-market offerings, raising the stakes for the merged firm to deliver on its promises.

The Bottom Line: A Buy or a Wait-and-See?

The merger’s $7 billion valuation and $3 billion revenue target position it as a formidable player in the middle-market space. With private equity backing, geographic synergies, and a clear leadership roadmap, investors might see upside potential in the combined firm’s ability to capture market share. However, execution risks—including seamless integration and regulatory hurdles—must be monitored closely.

In the end, the Baker Tilly-Moss Adams merger represents more than a consolidation of balance sheets. It’s a bet on the future of accounting: one where private equity-funded scale, global reach, and specialized advisory services will be critical to outpacing both legacy rivals and tech-driven newcomers.

Conclusion
The $7 billion merger of Baker Tilly and Moss Adams marks a pivotal moment in the accounting industry’s evolution. With combined annual revenue of $3.06 billion and a global network spanning 143 territories, the new firm is poised to challenge the Big Four’s dominance in middle-market advisory services. Private equity investors like Hellman & Friedman have staked their credibility on the deal’s success, while leadership transitions and cultural alignment will be critical to realizing synergies.

For investors, the merger offers exposure to a sector with steady demand for audit, tax, and advisory services—key in an uncertain economic climate. While risks exist, the valuation’s emphasis on long-term growth potential, rather than short-term profits, aligns with trends in professional services consolidation. As Eric Miles put it, the merger aims to “set a new standard for advisory services.” Whether it achieves that remains to be seen, but the $7 billion price tag suggests the market is already betting on it.