Accounting Firm consolidation

Hello Everyone,

We are a small team looking to acquire & consolidate accounting/bookkeeping/tax prep practices in the US/Canada. The main points of the thesis: 1) a massive shortage of local accounting talent/resources 2) lower multiples relative to other industries 3) many cross selling opportunities for recurring revenues (payroll, tech, hosting, etc###-###-#### most sellers are comfortable financing a significant amount of the acquisition. These are the most obvious but the twist is that we are looking to outsource/offshore a significant amount of the work to create a more compelling margin structure and ability to scale. From our initial analysis, most owners are comfortable exiting with a final payout based on customer retention. This would offset some risk but (potential) churn is where we feel the most significant risk might be.

The team consists of a serial entrepreneur as well as senior 1) M&A Executive 2) Customer Success Exec (software) 3) CPA/CA with an MBA to lead operations

Questions for the community: 1) has anyone gone through this process before and done a market analysis 2) other than size, customer demo/mix, location, etc., what criteria should we be using to source potential acquisitions 3) what legal constraints are there, we realize there are state specific regulations, etc. around non accountants/CPAs owning tax prep 4) Any ideas on streamlining operations post acquisition? 5) Is there any appetite for institutional investors in this space? 6) General comments and/or feedback

Lot of info, feel free to comment on all or any of the points above. Thank you!