Accounting firm HBK CPAs and Vertical Solutions, a Pittsburgh-based managed service provider (MSP), have merged.
This is technology M&A deal number 551 that ChannelE2E has covered so far in 2021. See all technology M&A deals for 2021 and 2020 listed here.
Once the transaction is closed, Vertical Solutions will merge operations with HBK IT, an HBK company. The combined company will then be renamed Vertilocity and will operate out of Pittsburgh and Clark, New Jersey. It will also have a presence in the Denver, Colorado area, the company said.
The company will be helmed by Vertical Solutions president Bruce Nelson. It currently has an estimated annual gross revenue of $10 million, according to the company.
HBK CPA and Vertical Solutions Merger: “Steeped In Experience”
Christopher M. Allegretti, CPA, HBK managing principal and CEO, commented:
“Digital technology is the most impactful disrupter in business today. Everywhere and in every industry, companies are embracing digital transformation. The Vertical Solutions team is steeped in experience in organizational workflows, systems, and software, and will support our initiative to provide relevant, sophisticated technological support to our clients.”
Bruce Nelson, president of Vertical Solutions, said:
“I’m extremely excited about what this merger brings to our team and the clients of both firms. HBK IT has extensive capabilities, and our firms share a vision for technical solutions, that they are built around solving business challenges. Our collective technical expertise along with the financial services offered by HBK combine for a unique, comprehensive, and extremely valuable offering to our current and future clients.”
About Vertical Solutions
Vertical Solutions was originally founded in 1993. The company was acquired in 2007 by R.L. Nelson and Associates Inc, a Pittsburgh-based information systems consulting firm. The company specializes in working with healthcare businesses and institutions, which will help HBK support its more than 600 healthcare clients, according to the company.
Vertical Solutions operates out of offices in Pittsburgh and remotely in and around Denver where about one-third of its clients are located. This will extend HBK’s IT and MSP services to the West, while providing a foothold for Vertilocity in the three major markets of Pittsburgh, Denver and the New York metropolitan region.
About HBK
HBK’s CPA operations have existed since 1949. The company added a wealth management practice in 2001 and now provides SMBs with a range of financial solutions including tax and audit services, wealth management, business valuation, corporate finance, forensic accounting, litigation support services, and business consulting.
The CPA-MSP Trend
The HBK-Vertical deal is part of a recent trend of accounting firms branching out into various service-related businesses. It’s not uncommon to find CPAs now offering technology consulting, risk mitigation, cybersecurity and managed IT services to their clients.
Many of those accounting firms are diversifying into the IT services sector through M&A deals, as Forrester Research principal analyst Jay McBain and ChannelE2E have frequently pointed out.
These deals are often a way to add predictable monthly recurring revenue to an accounting firm’s ledger – the exact sort of revenue that MSPs and cloud service providers are well-equipped to deliver.
ChannelE2E’s ever-growing list of M&A deals in the sector can be found here.
