TFS Gulf 
- Hi, I’m Atul Deshmukh, and I head the International Assurance and Advisory Practice at KNAV, a firm with over 500+ team members and $35 M+ in revenue.
- After the UK, the Netherlands, and Singapore, we set our sights on the UAE by acquiring a majority stake in Affiniax.
- Here’s why we don’t rely on “vanity” EBITDA, the biggest lessons we’ve learned, and the most costly mistake you can’t afford to make.
UAE opportunity: a market coming of age
There was a time when the UAE operated under a degree of uncertainty, but over the past few years, the UAE has become a well-regulated financial hub.
Today, the framework is strong, the infrastructure is world-class, and the talent pool is highly skilled.
On top of that, millionaires and big companies are relocating from the UK due to higher taxes, and even US hedge funds are setting up shop in Dubai.
Demand for professional services has exploded across every service line. Audit and assurance were once limited to specific sectors, but Corporate Tax and new corporate setups have made them mainstream.
Transaction advisory is booming; tax structuring, governance, compliance, all of it is rising sharply.
For global companies, Dubai has become a springboard to jump straight into the European markets.
We couldn’t miss this opportunity.
How the deal happened
We didn’t want to enter the UAE by building from scratch. We wanted to partner with an established, full-service firm that could deliver across Audit, Tax, and Advisory from day one.
In early 2024, Sumeet Nayyar (CEO, Affiniax Partners) met Nishta and Vaibhav at an Allinial Global conference in Singapore. At that point, it was simply an exchange of ideas.
Over time, as trust developed, the relationship evolved, and we moved forward with the acquisition proposition.
Operationally, Affiniax (also an Allinial member firm) was already our go-to partner in the UAE. Whenever our multinational clients needed audit support, entity setup, or advisory services in the region, they were the firm we relied on.
This meant there was already alignment in terms of professional standards and quality expectations.
The Deal Specs:
- The Team: 90 professionals globally (65 in the UAE), supported by Indian delivery teams.
- The Capabilities: A full suite covering International Tax, M&A Due Diligence, Valuations, and Corporate Secretarial services.
- The Fit: When scaling through acquisitions, cultural and technological compatibility are non-negotiable. Affiniax checked every box.
Math behind accounting firm valuations
Whether we are looking at a firm in Dubai or scouting a non-network firm in Singapore, my evaluation criteria are non-negotiable.
If you want to know how we value a business, here is the math:
Adjusted EBITDA (after fair partner salary): We don’t look at “vanity” EBITDA. We look at profitability, specifically, EBITDA as a percentage of revenue.
But there’s an important adjustment: Partners need to be paid a fair market salary before you calculate EBITDA. Only then do you get a true picture of the firm’s underlying profitability. Without that adjustment, EBITDA can look artificially high.
Net income in absolute terms is equally important: A firm might have a strong EBITDA margin, but if it only generates $300,000 in net income, it doesn’t move the needle from an acquisition perspective.
We also evaluate operational quality: Revenue per employee tells us how productive and efficient the firm is.
The composition of the team matters too.
The ratio of licensed professionals, such as CPAs or Chartered Accountants, to unlicensed staff is a significant factor.
All of which increase the firm’s long-term value.
Recurring vs. Transactional Revenue
- If a firm’s revenues skew toward audit and tax compliance, that signals a higher proportion of recurring income. A positive indicator of stability.
- On the other hand, if the firm leans more heavily into tax advisory or pure advisory work, valuations, and transaction support, you’re likely looking at higher margins, but with more non-recurring revenue.
- For non-recurring work, the key question becomes, are the same clients returning year after year?
4x–6x EBITDA benchmark: Globally, there are also some broad valuation benchmarks to keep in mind.
For firms under roughly $8 million in revenue, acquisition offers typically range between 4x to 6x EBITDA, after adjusting for partner compensation.
We typically look for firms generating at least $1 million in net income and around $5 million in revenue.
Also read: CA Firms Kirtane & Pandit, Guru & Jana, SSKM unite to build India’s Next Big Global Consulting Firm
The acquisition process
From start to finish, the process took around six months to complete.
Here is how others can approach it.
Define your why
Before you even look at a target firm, you need clarity on why you want to acquire.
Is it their service lines?
Their team?
Or their client base?
The sourcing. Once we have a clear picture of what we are looking for, we put people on retainers to go find it.
We give them our size criteria and walk them through the parameters we care about.
They bring the market knowledge, the relationships, and the on-the-ground intelligence needed to surface the right firms.
And sometimes, the answer isn’t an acquisition at all. It’s simply hiring the right person.
Term sheet. After we have zeroed in on our ideal firm, the process formally begins with an initial term sheet. A term sheet lays out the key commercial and strategic principles of the deal.
Valuation. Once a firm clears the initial filter, we evaluate it in depth.
Due diligence. Once you agree on valuation and basic deal terms, the real work begins.
Because many accounting and advisory firms are licensed and regulated, the review isn’t just financial; it’s also regulatory. We look at how the firm operates day-to-day:
- How revenue is recorded
- How quickly clients pay
- How billing is structured
- How employees are hired, managed, and compensated
- Is revenue stable? Are profits consistent? Are there any red flags beneath the surface?
Deal structuring and closing. Then the lawyers come in to draft and negotiate the agreements that will govern the acquisition, and frankly, they take the most time. But it’s necessary. These documents are what protect both the buyer and the seller if issues arise later.
And after everything is discussed, valuation, payments, roles, and responsibilities are formally written down in clear, unambiguous terms.
Once that clarity is achieved, the final agreements are signed.
Also read: Ex-Tally CFO consulting firm KayEss Square acquires Consark’s tax division
Most important step: Successful integration
Initially, we thought six to nine months might be sufficient.
But our biggest lessons from pursuing multiple acquisitions…Integration is ongoing; it never truly ends.
There is tech integration, cultural integration, and firm-level integration.
We don’t leave this to chance. We have a dedicated Integration Leader, Raajnish Desai, who owns the process.
He develops a formal plan, aligns both sides, schedules weekly cross-functional meetings, and ensures issues are resolved quickly.
The deeper question is how you genuinely function as one firm, especially in cross-border integrations, where the variables multiply.
The “India-UAE Corridor”
It is the most aggressive professional services market in the world right now. Why?
Professional services are globalising.
Indian firms are targeting international markets.
For Indian firms, Dubai is a nearshore extension. For global clients, it is a strategic hub.
The UAE sits at the centre of this corridor. It offers access to Middle Eastern capital and European connectivity.
Deals like the Affiniax acquisition are part of a broader transformation.
Looking ahead, India remains our fastest-growing jurisdiction globally. We are actively looking at acquiring more firms, but the barrier to entry is real. Western firms are expanding in India.
Wrapping up…
The Bigger Story? AI.
Artificial Intelligence is rewriting audit and tax as we speak. Change is happening faster than your last billing cycle.
My message is simple: Be large enough to matter, but agile enough to move.
FAQs
Q: How do you calculate the valuation of an accounting firm in 2026?
A: Valuation is typically based on a multiple of Adjusted EBITDA, generally ranging from 4x to 6x for firms under $8M in revenue. The “adjustment” must account for fair market partner salaries to reveal true underlying profitability.
Q: How long does it typically take to acquire and integrate an accounting firm?
A: While the legal and financial deal might close in six months, full integration—covering technology, culture, and quality standards, is an ongoing process that often requires a dedicated “Integration Leader” to be successful.
