On the latest episode of Behind the Buyouts, Patrick Hughes, head of accounting services at Houlihan Lokey Inc., discussed the state of accounting M&A in 2026 and the industry’s evolution from a largely untapped market to one where more than half of the top 100 accounting firms have private equity backing.

Hughes, who previously worked in corporate development, or M&A functions for both Grant Thornton LLP and EisnerAmper LLP, joined Houlihan Lokey in April 2024 to help launch the bank’s accounting M&A practice.

Alternative practice structures and regulatory changes have enabled private equity firms to invest in accounting platforms over the past few years, unlocking capital for acquisitions, technology investments and operational transformation, according to Hughes.

Hughes cited TowerBrook Capital Partners LP’s August 2021 investment in EisnerAmper, New Mountain Capital LLC’s April 2022 investment in Citrin Cooperman and Grant Thornton’s strategic initiatives as catalysts for industry change.

While there are growing concerns around AI disruption in accounting services, Hughes argued that AI will enhance efficiency and profitability but is unlikely to replace the trusted-adviser role accountants play for clients.

Strong PE demand, long portfolio hold periods and improving macroeconomic conditions will support a significant wave of deal activity through 2027, Hughes added.

“There are a lot of really good companies out there that are looking to come to market, and there are a lot of good companies that have been put on the shelf, frankly, because of the hysteria around AI, that would like to be sold or [are] ready for a new partner but need to get out of this window of uncertainty,” Hughes said.

Listen to the podcast with Patrick Hughes below:

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