TPG-backed Smith + Howard plans AI push and new acquisitions on $175M revenue

What's the deal? Smith + HowardDealroom has a profile for this one. Try Dealroom →, an Atlanta-based accounting firm backed by private equity giant TPG, is preparing a fresh round of acquisitions—including two that could close by year's end—while rolling out AI to handle routine work. The firm employs more than 800 people across seven states and expects about $175 million in revenue this year.

Why now? TPG bought the firm from previous backer Broad Sky PartnersDealroom has a profile for this one. Try Dealroom → in August, inheriting an active buyer of smaller firms. Smith + Howard now wants to add another 20% to 25% of its 12-month forward revenue through deals.

What's the endgame? It plans to lift its acquisition target size to firms with $5 million to $50 million in annual revenue, up from $2 million to $20 million, with more deals planned for 2027. It also aims to expand into more US cities and add services it currently refers out.

The AI bet: The firm has rolled out Anthropic's ClaudeDealroom has a profile for this one. Try Dealroom → companywide and is hunting for a C-suite executive to lead AI efforts. Chief executive officer Sean Taylor said the goal is to grow without hiring accountants at the previous pace, automating work where there's "a lot of lather, rinse, repeat." He noted complex financial statement audits would be much harder to automate.

What could go wrong? There's debate over whether firms will pass AI savings to customers, washing out the financial benefits. Brian Goffman, TPG's managing director of AI, argued accounting has a track record of holding onto gains: "In accounting, that doesn't seem to be the case," he said of the race to the bottom seen elsewhere.

Taylor said private equity investors had split into two camps—"those that were very excited about how AI could affect our industry and those who were very scared"—with the latter fearing it would cut billable hours and revenue.

The signal: The move reflects a broader bet that AI can boost profits when consolidating professional services. OpenAI's majority-owned Deployment Co.Dealroom has a profile for this one. Try Dealroom → launched in May with TPG backing, while Thrive Capital and General Catalyst pursue similar AI-focused rollups. Whether the technology delivers returns—or sparks a pricing race to the bottom—remains the open question.

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Image credit: Generated with Gemini