Gaurav Malhotra buried himself in his work this past year.
On the one hand, Lucas Horsfall – the middle-market accounting firm based in Pasadena, where Malhotra has clocked in nearly 27 years – saw a rise in work that bucked the layoffs seen at the so-called Big Four accounting giants this past year. On the other hand, it was the best way he could distract himself from the fact that his home – and community – had burned down in the Eaton Fire at the start of the year.
“Losing the community is way more painful than losing the house, because you have to live with that every single day. You lose the house on one day, but then you lose your community every day when you’re not home,” he said in a recent interview. “So absolutely, I buried my head in work. You move the (house) paperwork along right to the best of your ability, and then you can’t do anything about it. You can’t ruminate on it. It went back and forth in both ways for me, where what I was doing at work was helping me (with the rebuilding), and what was happening (with the rebuilding) caused me to concentrate better at work.”
It was a good time for Malhotra to be on the ball at work. At the start of the year, he said Lucas Horsfall was handling seven or eight deals at a given time. By the end, that number had doubled, and the firm had added about 60 new professionals. This is despite President Donald Trump’s so-called “Liberation Day” – when he levied often unforgiving tariffs against many of our trade partners – putting an end to what Malhotra described as “gangbusters” start to the year.
“If you look at bigger firms, they cut their workforces who were working on transactions,” he said. “We had the opposite experience.”
In speculating on why that was, Malhotra stressed the region’s extremely middle-market nature, which is home to just six Fortune 500 companies. The county started 2025 with eight, but two – Endeavor Group Holdings and Skechers U.S.A. – were taken private later in the year.
Accounting professionals at a place like Lucas Horsfall, where many have spent entire careers, have a more personal touch for owner-operated businesses in Los Angeles County that find themselves in the M&A puzzle, he said.
“I think I know we were having the opposite experience for a multitude of reasons. One is that we were taking market share,” Malhotra explained. “When difficult times arise, you want to work with people who are, you know, not just going to be accountants, but who are going to be intuitive, and who are going to understand your business and are going to be able to help you. You want to work with advisers who have a sense of empathy.”
Two deals came to mind for Malhotra as favorites for 2025 – one was facilitating the sale of a second-generation aviation company, where he documented additional revenue streams that increased the sale price. The other was a sale brokered in a way that, through donations and other avenues, was exempt from taxation.
While transactions like this highlight traditional business exit activity – for retirement – Malhotra said they now represent a minority of M&A sales for his firm. At least 60% are younger, usually tech-based entrepreneurs, he said.
“A lot of people that we deal with who are selling businesses that actually not ones who are retiring,” Malhotra continued, “but are the young folks who had started businesses with the intent of growing it to exit it – folks in their 30s or 40s.”
Lucas Horsfall, like other accounting firms, is no stranger to consolidation. The firm was sold in 2024 to private equity-backed Ascend, an Arlington, Virginia-based regional accounting platform. Lucas Horsfall also pulled the trigger on three mergers this fall: Encino’s Gettleson, Witzer & O’Connor as well as Seiler & Associates and Skeehan & Co. in Pasadena – moves enabled by the runway afforded by the Ascend transaction, Malhotra said.
Going into 2026, Malhotra conceded that there remain concerns – job numbers remain troubling, to the extent we are aware of them, in the wake of the federal government shutdown. On-and-off tariffs can adversely affect the costs of doing business.
That said, the examples of retiring business owners, young entrepreneurs looking to capitalize early, and financial institutions seeking opportunities are hard to ignore, he added.
The facts are, there is a lot of cash and a lot of “dry powder” hanging around that needs to go to work. Business owners are aging and need an exit.
“Those two remain factual,” Malhotra continued. “The uncertainty which was in the marketplace around tariffs, buyers are starting to get comfortable with it, because – unless something crazy starts happening again – it’s already playing out in the numbers and in the financials. Those are all positives.”
Accountants will continue to find these opportunities, he added.
“We just have to find the bright spots in the economy, go over there and find work there,” Malhotra said.
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Zane Hill
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