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PE firms expand accounting firm investments

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Private equity firms are making further inroads in the accounting profession, with two PE-backed firms, Ascend and Springline Advisory, announcing a series of deals.

Ascend, which is backed by private equity firm Alpine Investors, said Monday it added HD Davis in Youngstown, Ohio, and PP&Co in San Jose, California. 

In addition, ATKG Advisors LLC, Ascend’s San Antonio, Texas-based partner firm, completed transactions with two south Texas firms in January: Michalak CPAs & Advisors in Spring Branch, and Kowalsky, Rose & Co. P.C. in Laredo. 

ATKG equity partners.jpg

ATKG’s equity partners (from l to r): Teryn Grater, AJ Sturm, Melanie Kirk, Brian Trussell, Eric Abati, Allison Miller, Angie Stone, Diane White

Ascend invested in a number of firms last year, including Opsahl Dawson in Vancouver, Washington, in January; ATKG in San Antonio in May; LMC in New York City in June; Sentient Solutions for Accounting, an offshore services provider in India and Mexico, in July; Goering & Granatino in Overland Park, Kansas, in October; and Wilson Lewis in Atlanta.

In Ascend’s latest deals, with HD Davis and PP&Co, both firms will adopt an alternative practice structure, as is common in private equity deals with CPA firms. For both HD Davis and PP&Co, the tax, business advisory and other non-attest services will be provided by a newly established entity on the Ascend platform, while attest services such as audit and assurance will be provided by a separate, independently owned and licensed CPA firm. HD Growth Partners will be the new tax and advisory entity formed by Ascend, along with a sister company called White Glove Payroll, 

Financial terms of the deals were not disclosed. HD Growth Partners will add 70 professionals, including five partners, to Ascend, while the PPCo team of 102 includes 11 partners. 

“Ascend’s mission and our mission are perfectly aligned, and the timing could not be better,” said Tim Petrey. CEO of both HD Growth Partners and White Glove Payroll, in a statement Monday. “We’ve been very progressive in reinvesting in our firm for years, but ultimately our growth would have continued to be limited by our own resources. The partnership with Ascend allows us to maintain our identity and our amazing culture while giving us the resources to build the firm of our dreams and empower our team to build the careers of their dreams.” 

“Ascend is bringing a lot of ideas into the accounting industry that target the pain points firms have lived with for a very long time,” said PPCo Advisors LLC CEO Phuong Mayer in a statement. I’m energized by how Ascend understands the changing needs of our clients and employees and aims to help us revitalize our industry by addressing those needs. As CEO at PPCo, I will be able to ensure we continue focusing on the two things I’m most passionate about – building strong professional development programs and being at the forefront of digital transformation.” 

The addition of Michalak CPAs & Advisors to Ascend’s San Antonio-based partner firm ATKG adds two new partners, Dustin Michalak and Will Holisky, in Spring Branch, Texas. Kowalsky, Rose & Company, P.C. gives ATKG a presence in the Laredo market. They are ATKG’s first corporate transactions since joining the Ascend growth platform in May 2023.

“Both of these firms add great new talent to our exceptional professional team and further enrich our depth of knowledge,” said ATKG CEO Eric Abati in a statement.

Separately, Springline Advisory, which is backed by another PE firm, Trinity Hunt Partners in Dallas, invested in BGBC Partners, an accounting and advisory firm based in Indianapolis.

Trinity Hunt Partners formed Springline Advisory last month in partnership with MarksNelson, a Kansas-based accounting firm it invested in last year. Its latest deal is in Indiana with BGBC.

“At BGBC, we’ve always prioritized an employee-centric culture, striving for excellence with a personal touch combined with exceptional client service,” said BGBC managing partner Kyle Simmerman in a statement. “Joining the Springline platform aligns perfectly with our values, allowing us to scale our business while maintaining the trusted relationships we’ve built with our clients and commitment to our firm values and culture.”

Koltin Consulting Group CEO Allan Koltin provided counsel to BGBC Partners on the deal.  

“BGBC Partners is one of the top CPA Firms in Indianapolis and this combination should accelerate their growth as well as provide additional resources and services for their clients,” he said in a statement. “Combined with the financial backing of private equity firm Trinity Hunt Partners, I’m expecting big things from this group!”

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