Pevita Pearce
Canfield, OH-based HBK, a prominent accounting and advisory firm, has announced a strategic investment from H.I.G. Capital, a global alternative investment firm headquartered in Miami with approximately $75 billion of assets under management. This significant capital infusion marks HBK as the latest among the nation’s top accounting firms to embrace outside investment, signaling a pivotal moment in its long-standing history and future trajectory. The financial specifics of the deal have not been publicly disclosed. The transaction is slated for completion in the fourth quarter of 2026, contingent upon the satisfaction of customary closing conditions and the receipt of all necessary regulatory approvals. This partnership will establish H.I.G. as HBK’s inaugural institutional investor.
A New Chapter of Expansion and Preservation
A key tenet of this agreement is that HBK’s partners will retain leadership of the firm. The collaboration with H.I.G. is designed to empower HBK to preserve its deeply ingrained culture and unwavering client-first philosophy while simultaneously unlocking access to enhanced resources and capabilities. These newly acquired assets are poised to fuel the firm’s next phase of expansion across its diverse service lines, encompassing HBK CPAs & Consultants, HBKS Wealth Advisors, and Vertilocity, its dedicated technology advisory practice.
Tom Angelo, CEO of HBK CPAs & Consultants, articulated the significance of this development, stating, "This partnership marks an exciting new chapter for HBK. In H.I.G., we found a partner that shares our values and our long-term vision, and that recognizes what makes HBK special. With H.I.G.’s resources and experience, we will invest further in our people, our technology, and our client service capabilities, expanding both what we can do for our clients and the opportunities we can create for our team while preserving the culture that has defined our firm since 1949." This statement underscores a commitment to balancing aggressive growth strategies with the retention of core values.
Expanding Reach and Service Offerings
HBK’s expansive network currently spans 27 offices across seven states and extends to India, where its professionals diligently serve tens of thousands of clients. This diverse clientele ranges from entrepreneur-led and family-owned businesses to high-net-worth individuals and families, reflecting the firm’s broad market penetration and comprehensive service model.
Chris Allegretti, CEO of HBKS Wealth Advisors, a firm recognized on Barron’s Top RIA Firms list, emphasized the benefits for clients: "Partnering with H.I.G. gives us the resources to scale our business and invest in the professionals and technology that matter most to our clients. HBKS clients will continue to work with the same advisors, in the same offices, under the same standard of care, as we continue to deliver comprehensive advice to individuals, families, and business owners." This assurance aims to mitigate client concerns about potential disruptions and maintain continuity in service delivery.
H.I.G. Capital, with its global presence and substantial assets under management, brings a wealth of experience in fueling the growth of middle-market companies. The firm’s extensive network includes offices in major U.S. cities such as Atlanta, Boston, Chicago, Los Angeles, New York, San Francisco, and Stamford, as well as international affiliate offices in key global financial hubs like Hamburg, London, Luxembourg, Madrid, Milan, Paris, Bogota, Rio de Janeiro, Dubai, and Hong Kong. H.I.G. specializes in providing both debt and equity capital, positioning them as a strategic partner capable of supporting diverse growth initiatives. Their current portfolio boasts over 100 companies with combined sales exceeding $53 billion, illustrating their capacity to manage and grow significant enterprises.
Chris Byrne, a managing director at H.I.G., expressed his firm’s perspective on the partnership: "HBK is one of the most respected firms in accounting and wealth management, with more than 75 years of technical excellence and a reputation built on trusted, long-term client relationships. We are very impressed with the HBK team and how they have built the firm into an employer of choice across two highly attractive industries. We are thrilled to partner with Tom, Chris, and the entire HBK team to support the firm’s next phase of growth." This endorsement highlights HBK’s established reputation and its appeal as a desirable employer.
Navigating the Evolving Landscape of Professional Services
In anticipation of the investment, HBK will be adopting an alternative practice structure prior to the closing of the deal. This structural evolution is becoming increasingly prevalent within the accounting profession, designed to maintain CPA ownership of attest services – such as audits and reviews – while permitting external investment in other service lines. Under this new framework, the attest services will continue to be provided by its licensed CPA firm, Hill, Barth & King LLC, which will retain its name and remain under the ownership and control of its CPA partners. Tax, consulting, accounting, and technology services will be managed by HBK Advisory Group LLC, and wealth management services will continue under the banner of HBK Sorce Advisory LLC, operating as HBKS Wealth Advisors. HBK has reiterated that existing clients will experience no change in their advisory teams or service providers.
The trend of outside capital entering the accounting sector has been a significant development in recent years. Allan Koltin, CEO of Koltin Consulting Group, a leading M&A advisory firm in the CPA space, commented on the broader implications of such transactions. Although not involved in this specific deal, Koltin noted, "The good news to report is that we are now approaching 50 Private Equity platforms of CPA firms nationally (all created in the past 5 years!) and most of them are doing well. The big question will be how long will it take for significant consolidation to take place within the existing platforms?"
Koltin further elaborated on the evolving market dynamics: "The ‘history books’ tell us that ‘welterweights’ either grow on their own to become ‘middleweights’ or they ‘tuck’ into a ‘heavyweight’ 3-5 year later." He pointed to Prosperity Partners and Smith-Howard as prime national examples of successful "welterweight" firms that achieved substantial growth and significant valuation increases under private equity ownership. Prosperity Partners reportedly grew from $10 million to $80 million in three years, transitioning from one private equity partner to another, while Smith-Howard experienced a similar trajectory, scaling from $40 million to $180 million in three years. These examples underscore the potential for firms like HBK to achieve accelerated growth and value creation. Koltin concluded by expressing keen interest in observing whether HBK can replicate such success through both organic and inorganic growth strategies.
The advisory roles in this significant transaction highlight the professional ecosystem supporting such deals. Houlihan Lokey served as the financial advisor to HBK, with Levenfeld Pearlstein LLC providing legal counsel. For H.I.G. Capital, William Blair acted as the financial advisor, and Ropes & Gray LLP served as legal counsel. The involvement of these established financial and legal institutions underscores the complexity and strategic importance of this investment.
This strategic partnership between HBK and H.I.G. Capital represents a forward-looking approach to growth and adaptation in the dynamic accounting and wealth management industries. It is a move that reflects a broader industry trend toward leveraging external capital to enhance service capabilities, expand market reach, and foster continued innovation, all while striving to maintain the core values and client relationships that have defined firms like HBK for decades. The coming years will be crucial in observing how this investment translates into tangible growth and continued client success for HBK and its diverse clientele.
