How Kelly+Partners became Australia's 15th largest accounting firm through 57 acquisitions, funded with debt rather than new shares, for a ~10× return since its 2017 IPO.
Kelly+Partners Group Holdings (ASX: KPG) is an Australian accounting firm network founded in 2006 that has completed 57 acquisitions.
KPG's growth strategy centres on acquisitions of small accounting firms combined with select greenfield expansions. The firm employs a partner-based acquisition approach with local accounting practices via a 51/49 ownership model (51% KPG, 49% local partner).
Today, KPG has expanded beyond its Australian base, with approximately 35 operating locations (as of 2025). This includes offices in multiple Australian states and recent international forays into the United States, Asia and Europe. KPG now ranks among the top mid-tier accounting firms in Australia, reflecting its significant growth.
Since its IPO in June 2017 at $1.00 per share, KPG has delivered substantial capital gains as well as a steady stream of dividends. The share price has risen to around $10.50 by 2025, and including dividends, the stock achieved roughly a 10× total return (≈36% CAGR) over 8 years.
October 2025, when this case study was first published. Figures and company status reflect information available at that date.
Kelly+Partners was founded in 2006 by Brett Kelly, who remains the CEO, Executive Chairman and driving force behind the company. Under his leadership, the firm pioneered its unique partnership structure and roll-up strategy.
Starting with two offices in North Sydney and Central Coast, the company acquired 14 businesses across 12 sites in NSW, plus one in Hong Kong, by its ASX listing on 21 June 2017.
Brett Kelly has led KPG for its entire history (nearly two decades), providing continuity in executing the acquisition-led growth plan. Notably, Brett maintains a significant ownership stake of 46.6% (as founder) and is deeply invested in the long-term success of the roll-up strategy.
Since listing, KPG has expanded significantly. Revenue has roughly tripled from $36–40m in FY17–18 to over $134m in FY25, helping establish KPG as Australia's 15th largest accounting firm. By 2024 the network had grown to:
KPG earns revenue primarily from client fees to SMEs and individuals for accounting, tax compliance, audit and advisory work.
Importantly, more than 90% of revenues are recurring, as clients tend to stay year after year for ongoing accounting and tax needs. Client churn is extremely low (around 2% annually), giving KPG a stable base of fees.
Central to the model's success is KPG's centralised Service Office, which handles finance, HR, marketing, IT systems and quality control for all partner firms, delivering significant economies of scale.
This centralisation dramatically improves operating margins for acquired firms, from the industry average of around 19% EBITDA to 30–33% post-integration, with KPG achieving overall EBITDA margins near one-third and converting approximately 97% of EBITDA to operating cash flow through efficient working capital management.
Acquisitions are integral to the KPG business model, because organic growth in accounting is modest (low single digits in a mature industry). Each acquisition immediately adds revenue and clients, with KPG then working to improve margins through centralised services and cross-selling.
KPG has never had to write off a major acquisition or deal with a failed integration in its financials as far as disclosed; the careful selection and earn-out mechanism mitigate that risk.
A distinctive element of the model is the Partner-Owner-Driver® structure. The standard structure involves KPG acquiring 51% control while existing partners retain 49% equity through 10-year renewable agreements, ensuring continued entrepreneurial drive and client relationship continuity. For retiring owners, KPG facilitates 100% buyouts and installs new partners with 49% stakes. All acquired firms immediately adopt KPG branding and systems, unifying under the Kelly+Partners banner.
KPG's investment mandate focuses on building per-share intrinsic value through serial acquisitions of small firms that are accretive to earnings per share while maintaining high returns on invested capital. The company avoids large, risky deals in favour of "bolt-on" acquisitions that can be smoothly integrated using a proven playbook: immediate systems integration, standardised branding, process implementation, and partner training in KPG methodologies.
KPG targets small to mid-sized chartered accounting firms serving SME clients, typically where senior partners seek succession or growth solutions. KPG prefers firms with stable recurring revenues, quality staff and cultural alignment.
KPG employs a value-investor approach, seeking acquisition prices around 4–5× EBITDA. The deals have ranged from tiny one- or two-partner practices to multi-office regionals. Business sizes primarily fall in the $1–5m revenue range, with only two known deals transacting with revenues above $5m.
To date, Kelly+Partners' acquisition program has been extensive: 57 firms acquired (and over a dozen new offices launched) since 2006. A clear pattern is visible: relatively few acquisitions in early years, then a big uptick post-2017 as the company gained capital and momentum. In the last few years (2021–2024), KPG averaged 5–8 acquisitions per year, including its first international deals. This programmatic approach has yielded a fourfold increase in the number of operating businesses since IPO and approximately 30% compound annual revenue growth since inception.
KPG established its foundation through steady regional expansion, completing 14 acquisitions primarily in the Sydney area, including one Hong Kong office.
Following its IPO, KPG took a brief pause to digest existing operations while receiving 100+ acquisition inquiries, resuming expansion with an Inner West Sydney office by late 2018.
KPG expanded beyond NSW for the first time, establishing a Melbourne CBD office and completing approximately 4 acquisitions, including Kelly+Partners Blue Mountains.
During COVID-19, M&A activity slowed to 3 acquisitions as KPG focused on internal efficiencies while still achieving 14% revenue growth and rising to 23rd largest accounting firm nationally.
Acquisition activity accelerated with 7 deals, including major expansions into Canberra (ACT), Newcastle (Hunter Region) and Sydney's Northern Beaches.
8 acquisitions, including the Addison Partners deal in the Hunter Region, the first Victorian regional expansion (Bendigo), and Queensland entry via a Gold Coast acquisition.
KPG completed 8 smaller acquisitions while also making its first larger acquisition (more than $5m revenue) in Griffith. It also made international moves, launching offices in Southern California (including the Woodland Hills partnership), expanding in Queensland with Brisbane CBD, and establishing a Mumbai support hub.
6 acquisitions, including continued international expansion with a second US partnership in Burbank, California, and a strategic FRS CPA deal bringing a Florida/North Carolina presence. KPG acquired 50.1% of Kudos International, an international association of 60+ accounting firms in 45 countries. This strategic move gave KPG a global affiliation, effectively extending its reach into Europe, Asia and other regions through member firms.
6 acquisitions. These deals included a marquee acquisition (more than $5m revenue) in Florida, and other acquisitions in Wexford (Ireland), Sydney and the Hunter Region.
Kelly+Partners has primarily funded its growth through internal cash flow and disciplined use of debt, with minimal equity dilution. From 2017 to 2024, the share count remained flat (~45 million), with a single post-IPO issuance in 2025 to internal partners. Brett Kelly has consistently avoided issuing shares for acquisitions, instead relying on debt. This ensures earnings growth directly benefits existing shareholders. Inspired by Buffett and Constellation Software, KPG's capital strategy prioritises high ROIC and reinvestment over equity raising.
KPG generates strong cash flow ($19m in FY23), which helps fund acquisitions. Most acquisitions include earn-outs, allowing KPG to defer part of the purchase price. These are paid from future earnings and tied to performance over 2–3 years, aligning incentives and reducing upfront funding needs.
KPG draws on a debt facility to fund acquisitions, which increase EBITDA and cash flow, keeping gearing manageable. As of 30 June 2025, net debt was $58.5m, with net debt/EBITDA at 1.42× (up from 1.28×). Most of the $54.0m in debt is for acquisitions, structured to be repaid over five years and supported by recurring revenues.
KPG has raised $18.3m in equity since inception: $11.6m pre-IPO and $6.7m post-IPO (including $4.2m from partners in FY25). Management estimates a 23.5% ROIC and an 11.7× return on equity invested. With a 2:1 debt-to-equity model, KPG has access to up to $88.8m for further growth.
Since its founding, revenue has compounded at ~30% annually, growing from ~$40m in FY17 to $134.6m in FY25. This includes a 24.5% increase in FY25, fuelled by both organic growth (4.5%) and acquisitions (20%). The firm's client base is highly diversified, with 25,000 active groups and stable annuity-style recurring fees.
Profitability remains strong, with FY25 group EBITDA margins at 28.3% (slightly down from 29.6% in FY24), impacted by newly acquired US operations. EBITDA from Australian firms remained higher at 30.8%. KPG is known for a frugal cost culture. The central office ("Service Office") costs are kept lean relative to revenues, and there's heavy emphasis on efficiency (the company even systematised 80% of processes in templates).
While historically paying out 40–60% in dividends, the board has shifted towards reinvesting capital, recognising that internal returns (20–30%) outweigh the value of a 5–6% yield. This has strengthened KPG's self-funding growth engine.
Since its 2017 IPO at $1.00, Kelly+Partners' share price has climbed to ~$10.50 by mid-2025, delivering a ~950% return and a 35% CAGR, far outpacing the ASX300 (~4.9% CAGR). Early market scepticism kept the stock flat through 2019, but strong results and accelerated acquisitions drove a sustained re-rating.
KPG paid regular dividends from 2017–2023: quarterly at first, then monthly from 2021. By FY23, management suspended the final dividend and later opted to reinvest earnings for higher long-term returns, citing stronger internal ROIC. Over its dividend-paying period, shareholders received around 30 cents per share in total dividends.
Combined, capital gains and dividends have delivered exceptional total shareholder returns, backed by resilient earnings, even through COVID. The stock now trades at a high P/E (100×+) due to amortisation effects and future growth expectations being priced in.
Chart (bubbles): Kelly+Partners share price at key points
Source: Deal Advisory analysis.
The firm remains led by its founder, and shareholders' exit opportunities have come through the public market (selling their shares at greatly appreciated prices if they choose). The question of a future sale will depend on Brett Kelly's goals and perhaps succession plans, but for now the intention is to grow, not to sell.
The "exit" for many original investors has simply been the multi-bagger stock performance and ongoing dividends: a success in its own right.
Kelly+Partners' journey offers a clear roadmap for investors and operators aiming to execute a roll-up strategy in professional services.
KPG's 51/49 model ensures partners stay invested in the success of their firms. Retaining 49% ownership keeps leaders motivated post-acquisition and aligns long-term interests, avoiding the disengagement often seen after full buyouts.
Lesson: preserve founder incentives through equity retention or earn-outs to maintain performance and culture.
By sticking to ~4–5× EBITDA acquisition multiples and using debt (not equity), KPG avoided dilution and delivered strong per-share returns. Every deal had to be accretive, which built investor trust.
Lesson: be selective, avoid overpaying, and ensure acquisitions enhance, not dilute, value.
KPG built a centralised platform of systems and support services, enabling smooth integration and immediate margin gains. Margins rose from ~19% to 30%+ post-acquisition due to operational consistency.
Lesson: a repeatable playbook, strong infrastructure and unified brand are essential for scalable M&A.
Accounting services for SMEs offered recurring revenue, client loyalty and a highly fragmented landscape. Retiring firm owners created a steady pipeline of acquisition targets. KPG weathered the GFC and COVID without revenue decline.
Lesson: focus on fragmented, resilient, recurring-revenue sectors with succession challenges, ideal conditions for a roll-up.
Initial dividends built shareholder goodwill, but the board pivoted to reinvestment when returns outweighed yield. Brett Kelly's transparent communication and long-term orientation earned investor confidence and a high valuation multiple.
Lesson: treat shareholders like partners, communicate consistently and invest capital where it delivers the highest return.
Kelly+Partners' success is deeply tied to Brett Kelly's founder-led leadership, marked by disciplined capital allocation, transparent communication and a long-term mindset. His high ownership stake (46.6%) and hands-on approach in deal sourcing and culture-building ensured consistent execution across acquisitions.
Lesson: founder-driven leadership with deep alignment and clarity of vision is crucial.
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