M&A activity snapshot
Professional services deal volume has grown for two straight years while overall M&A was uneven. Lincoln International counted 680 transactions for the 12 months ended March 2024, 768 for the 12 months ended March 2025 and 792 for the 12 months ended March 2026 across the U.S., Canada and Europe. It notes the sector had better volume changes than the overall market for five straight quarters before a dip in the second quarter of 2026.
The category is built from small firms, which is why roll-ups work. The Census Bureau's 2022 Statistics of U.S. Businesses counts 872,305 firms in professional, scientific and technical services (NAICS 54), and about 93% of them have fewer than 20 employees (Axia's calculation from that file).
Activity is concentrated in a few verticals. Capstone Partners reported that accounting services M&A rose 26% to a record 194 transactions in 2025, and that marketing services M&A has risen each year since 2023. Trackers count differently, so compare each source's numbers with its own history rather than with another tracker's.
Who is buying
Private equity, directly and through portfolio companies. In Lincoln's data, PE firms and PE-backed portfolio companies increased deal volume by 32% and accounted for 48% of all professional services deal volume, while strategic buyers decreased their acquisitions by 14%. In accounting, Capstone reports financial acquirers accounted for 54.8% of deals year to date in 2026, up from 38.9% a year earlier.
Strategic acquirers still make about half of all purchases, often to add a specialty or a region. In marketing services, strategic buyers have retained the majority (68.6%) of sector deals.
PE-backed roll-ups buy smaller firms as add-ons, and are the most likely buyer for a firm with a few million dollars of revenue. GF Data reports that add-ons accounted for 36% of first-half 2026 deals in its data.
Independent sponsors and search funds target owner-operated firms below platform size, where client relationships and recurring fees can support acquisition debt.
What buyers look for
The common thread across professional services is revenue that stays after the owner leaves. Capstone describes sponsors targeting businesses with low customer concentration, a high degree of recurring revenue, and advanced technology-enabled offerings such as AI, and GF Data credits business services' small-deal premium to the resilience of asset-light, recurring-revenue models.
Lincoln adds that revenue recurrence, technology enablement and profitability have traditionally led to valuation disparities across subsectors. Generative AI is now part of that test: buyers ask whether a firm's work is protected by licensing, liability or specialized judgment, or whether it is hourly work AI will compress.
Regulation shapes deal structure in several verticals. CPA firms must keep the attest practice CPA-owned, and most states bar nonlawyer ownership of law firms, so investors use alternative practice structures and management services organizations. PEOs and staffing firms need state licenses or registrations that may not transfer automatically. Each subindustry page covers its own rules.
What makes a strong company
Across the subindustries, firms that draw several bids tend to share these traits:
- Recurring or repeat revenue: monthly accounting and advisory work, managed payroll, multi-year client relationships, or contract staffing renewals.
- No single client large enough to threaten the business, and documented retention by client cohort.
- A second layer of leaders (partners, account directors, recruiters) who hold client relationships, so the owner can step back.
- Margins and growth at or above the vertical's benchmarks (see each subindustry page).
- Clean licensing, tax and compliance records in every state the firm operates in.
Valuation and deal structure
Size is the biggest driver of price. GF Data's business services average was 7.5x EBITDA in the first half of 2026. In smaller deals, business services multiples averaged 6.2x EBITDA in H1 2025, a 0.4x premium to the historical average of 5.8x, and the $1-5 million and $5-10 million tiers averaged 5.5x and 5.6x across all sectors.
Lincoln's data on PE-owned professional services companies runs higher, with mean EV/EBITDA of 11.9x in Q2 2026. Those are valuations of larger portfolio companies, not prices paid for owner-operated firms.
Structure matters as much as the multiple. SRS Acquiom found that 35% of the smallest lower-middle-market deals (up to $25M) include an earnout, and that earnouts pay about 21 cents on the U.S. dollar across all deals. In PE platform deals, GF Data reports 68.3% included seller rollover equity, averaging 14.8% of TEV. Owners should model cash at close, not the headline price. For a first range on your own firm, use the Axia valuation tool; accounting firm owners can also read the accounting owner guide.
Subindustries
Each vertical has its own buyers, rules and value drivers. Accounting and staffing are the most active; law firms and payroll/PEO are shaped most by regulation.