Sikich expands into D.C. area
Top 100 Firm Sikich announced that it will acquire Alexandria, Virginia-based accounting firm Halt, Buzas & Powell Ltd., effective Dec. 31, 2019, marking its first entrance in the Washington, D.C., and Baltimore markets.
HBP offers audit and assurance, consulting, outsourced accounting, tax and technology services, with a strong specialization in serving nonprofits and government contractors.
“We’re always looking for folks that have expertise in the nonprofit space,” Sikich CEO Chris Geier told Accounting Today, noting that HBP’s focus on outsourced CFO services was also a draw. “We already do CFO services, and they happen to do it in the NFP space and do it fairly well -- it’s a big growth area for them, and it fits into our BPO service.”
Geier said HBP was a good match for Sikich from a cultural perspective, particularly when it comes to their attitude toward technology: “They believe in making investments in technology and innovation. If you don’t have that alignment, you have a big problem. […] If a firm has similar beliefs about what the future of the industry looks like, then we’re really in good shape.”
Financial terms of the deal were not disclosed. HBP managing partner Andy Powell will be joining Sikich as a partner, as will Marco Fernandes. Around 50 HBP staff will be also join Sikich, and will continue working in their offices in Alexandria and Crofton, Maryland.
Chicago-based Sikich ranked No. 28 on Accounting Today’s Top 100 Firms, with $169 million in revenue, close to a hundred partners and almost 800 staff.
The combination is part of the Chicago-based firm’s larger strategy of expanding to both coasts, particularly the East Coast, Geier explained.
“This is consistent with us broadening our geographic reach. We’re going to continue to build on that. We’ve got a pipeline that we’re working on as we speak on the East Coast,” he said, noting that the firm has a dozen or more conversations going on at the moment with firms across the country.
As the firm expands across the country, it plans to leverage the investments it has made in technology and the cloud to build client teams regardless of geographic location.
“We have pretty much broken down the barriers internally from an operational perspective in the way we operate,” Geier said. “We share the best staff across the footprint of all of our clients, with our best people and our best clients. If the best team member for a Virginia client happens to be in St. Louis, then they’ll be working on that job.”
Besides erasing geography, technology is now at the core of Sikich’s services. “Everything is centered around a vision where, in the future, we will be delivering all services with some kind of tech enablement,” explained Geier. “We’re embracing this concept of technology being at the core of our service offerings. That’s how we see the world.”
That vision also informs the firm’s M&A strategy, he continued: “Are we looking at businesses that don’t have a tech bent to them? No, not really. That’s not something we see a bigger, brighter future in. […] If firms aren’t able to acquire or merge with someone who can offer technology-enabled services, it’s going to be a death by a thousand cuts. They’re going to lose business to competitors who are offering them, and they’re going to lose staff, too.”
Sikich has been active in acquisitions of late; in October alone, it announced deals with Salesforce provider NexGen Consultants, Wisconsin’s Freyberg, Hinkle, Ashland, Powers & Stowell, and Illinois-based CPA firm Scanlan & Leo.
The firm isn’t relying solely on mergers for growth, however.
“We just locked down our 2020 budget,” Geier said, “and we budget organic growth, but we don’t budget M&A growth. Organic growth across the organization is just shy of 11 percent organically. We expect that we will probably do the same from an M&A standpoint. 2020 could be a very big growth year for us just based on what’s in our M&A pipelines, and we feel really good about our organic growth in 2020 as well. We’re making significant progress in terms of our operational effectiveness. Net income is up 30 percent over last year. We’ve got smart growth going here.”