With three acquisitions finalized this month, one of Richmond’s biggest accounting firms is further expanding its geographical reach, and moving further afield from traditional number-crunching.
Cherry Bekaert, headquartered in the Williams Mullen building downtown, in recent weeks absorbed two accounting firms in Nashville and Maryland, while adding a longtime Richmond-based IT company into its ranks.
On the accounting side, the company acquired Frasier, Dean & Howard, giving Cherry Bekaert its first foothold in Nashville. It also took on Rockville, Maryland-based Berlin Ramos & Co., adding to its presence in the Washington, D.C. area.
Both deals closed Nov. 1. Terms were not disclosed.
Also on the first of the month, Cherry Bekaert acquired The Computer Solution Company of Virginia, a Richmond-based IT company founded in 1981.
While it may seem unusual for an accounting firm to buy an IT company, Cherry Bekaert CEO Howard Kies said the TCSC deal is a continuation of the firm’s strategy to advise its clients beyond accounting and tax services.
“The environment we’re in is changing rapidly,” Kies said. “Our clients look to us to help them solve problems and help them achieve their goals. A lot of that has to do with the information they have in their system.”
Kies said Cherry Bekaert had been searching for a deal to expand more into IT services to help clients manage their data and use it to better run their business.
“We found one right here in our own backyard in Richmond,” he said. “I know it won’t be the last acquisition in this area.”
TCSC now operates as a newly created technology consulting unit within Cherry Bekaert dubbed THIncIT.
The company’s 40 or so employees will stay on, including David Romig II, who in 2000 took the company over from his father, founder David Romig Sr.
Romig Sr. started the company in 1981 and has remained actively involved in the business as chief technology officer.
“I grew up in the business,” Romig II said. “He’s the geek and I’m the business guy, so that’s always been fun for us.”
Romig II said the deal was prompted in part through interactions over the years with Cherry Bakeart, which had been a TCSC client.
“We realized there were a lot of similarities not only in the history of the organizations but where we’re headed,” Romig II said. “We all have a much more grandiose vision than us just operating as we have been.”
The company, which offers software products and service and integration on the hardware and systems side, has earned annual revenue in recent years between $7 million and $10 million, Romig II said.
Among its specialties are software programs that it sells to states and federal agencies for law enforcement, crime scene management and DNA cataloguing.
Romig II, now principal at Cherry Bekaert and president of THIncIT, said the company will continue operating from TCSC’s office at 1525 Huguenot Road in Midlothian.
For its other deals, Kies said, Cherry Bekaert was drawn to Nashville because it’s vibrant, growing market and the firm had been looking for an entrance there for some time.
“We were looking at that market and looking for the right firm,” Kies said. “We’ve been talking with (Frasier, Dean & Howard) for about a year.”
It was drawn to the Berlin Ramos deal for that firm’s client base in real estate, construction, hospitality and retail, which complements Cherry Bekaert’s existing operation around D.C.
The three deals add about $25 million in revenue to Cherry Bekaert, which Kies said recently eclipsed $200 million annually, with its largest markets in D.C., Atlanta and South Florida.
The acquisitions also added about 150 employees to Cherry Bekaert’s roster, which now totals approximately 1,100.
Kies said the firm has an eye on growth, but will choose its spots wisely.
“There’s an old saying: Bigger isn’t better, but size does matter,” Kies said. “We would like to have about a 7 percent (annual revenue) growth rate supplemented with an aggressive acquisition strategy.”
The firm has made a habit of growing through acquisition and Kies said it is negotiating additional deals that he expects to announce before yearend, including one that will take it into another new market.