Cherry Bekaert has acquired Microsoft reseller ArcherPoint, as well as an affiliated solutions developer, Suite Engine, expanding the Top 25 Firm’s enterprise resource planning services.

Lawrenceville, Georgia-based ArcherPoint is a Microsoft Certified Solutions partner with offices in the U.S., Canada and India, reselling Microsoft Dynamics 365 Business Central, Dynamics NAV, LS Retail and Azure, among other products.

Suite Engine, a wholly owned subsidiary of ArcherPoint, is also based in Lawrenceville, and is a Microsoft Solutions Partner and AppSource ISV publisher, with solutions for equipment dealer management, multichannel sales management, construction management, and payment processing.

The deal is the latest in a series of acquisitions by Cherry Bekaert, as part of an M&A strategy accelerated by its partnership with private equity firm Parthenon Capital in June 2022. Most recently, in August the firm acquired another ERP services provider, Sage reseller Kerr Consulting.

“We’ve been very focused this year on refining our strategy really tightly around the clients that we serve and what are the types of solutions that those clients need and want,” Cherry Bekaert CEO Michelle Thompson told Accounting Today. “That’s really driven the strategy to double down on the ERP area.”

Roy Nicholson, Cherry Bekaert’s growth & digital services leader, added, “We see ERP as being a foundational capability to bring the entire firm’s existing capabilities to our clients, to help them modernize, grow and transform, so Kerr Consulting with its Sage capability, ArcherPoint with its Microsoft delivery capability, and we also have advisors, so our technology advisory practice that advises clients on other technologies, even if we don’t have the implementation capabilities — things like NetSuite and Acumatica.”

The deal will not only expand the number of ERP systems that Cherry Bekaert supports, but is also expected deepen the range of advisory services it can offer its clients.

“We think of ourselves as business advisors, not accountants or technologists; we’re business advisors, so we’re very focused and intentional, and our partners think about our clients in two ways,” explained Thompson. “One, there’s the service partner — ‘That’s my silo; I’m delivering an audit’ or ‘I’m delivering an ERP implementation’ — but then there’s the relationship partner, who’s really focused on, ‘How do I expand that relationship?’ We have focuses on both of those, so we’re very intentional around how we do that, so that trusted advisor component of our strategy is individually and systematically implemented in our client base.”

Inside the deal

The terms of the combination were not disclosed. ArcherPoint has a staff of 175 people, and revenues of approximately $32 million; it ranked No. 36 on Accounting Today’s 2024 VAR 100 list. For now, its staff are expected to continue operating as an independent unit.

“Over time we will look at maybe building out a broader business applications capability, but for now it will be business as usual,” said Nicholson.

The deal was unusual not just because ArcherPoint is the largest independent Business Central reseller, according to CEO Greg Kaupp, but because of some of the unusual business structures the reseller had in place: Among other things, ArcherPoint is an employee-owned company, with an ESOP in place since 2018, as well as a “phantom stock” plan for its employees outside the U.S. who can’t participate in the ESOP.

“What really struck me with my interactions with the Cherry Bekaert team from the first moment was that nothing we shared with them scared them,” said Kaupp. “We talked to a number of companies that were interested, and we told them our unique structure, our operations — we have a somewhat unique governance strategy called ‘holacracy‘ — and that made a lot of people nervous, but not Cherry Bekaert.”

He continued, “What caused me to know that these were people that I wanted to work with, was when they came back, they’d done their homework on the ESOP and they’d done their homework the phantom stocks, they’d done their homework on the international operations, and they came back with an approach that was so thoughtful and unlike anything else we’d seen anyone else present — that gave me a lot of confidence that this was going to be an amazing opportunity.”

Kaupp noted that ArcherPoint kept its team filled in on the deal even before they had signed a letter of intent with Cherry Bekaert.

“One of the things I loved about working with Michelle and Roy and the team at Cherry Bekaert was that they saw all this not as a problem, but as an opportunity,” he explained. “They said, ‘Wow, if you are communicating with your team ahead of time, there’s so much we can do in terms of people and culture.”

Thompson came to do a presentation to ArcherPoint’s staff after the LOI was signed, and Cherry Bekaert set up an internal FAQ site where staff could ask questions and get answers.

“The amazing thing for us as part of this whole process was how Cherry Bekaert worked with us to make sure that when we came to a close, people had had the opportunity to already meet the Cherry Bekaert team and get comfortable with not only the deal economics, but what this would represent for their career, and to get excited about the Cherry Bekaert vision of where they’re going,” Kaupp said.

Where Cherry Bekaert is headed may well include expanding more in ERP services.

“We’re going to continue to look at other opportunities in the ERP space, but then also outside of that as well,” said Nicholson. “In our conversations with Greg and others about adjacencies with CRM platforms, and also other solutions in the finance space, specifically FP&A — maybe we’ll at that at some point in the future. We’re going to continue to look into how we can expend our ERP capabilities.”

But Thompson was quick to point out that Cherry Bekaert’s M&A strategy is not opportunistic.

“Part of our PE investment has really helped us execute on our strategy in a more rapid way, which was our thought process about changing our business model to enable us to do this quickly, but we’re intentional about it,” she said. “It’s not just anything and it’s not just anywhere; it has to be intentional.”

Qualities the firm stresses in M&A include targets that add to critical mass in a particular physical location, targets that offer an industry concentration that deepens the firm’s industry expertise, and the depth of a target’s capabilities.

But all of those qualities are secondary, according to Thompson.

“It always starts with the cultural fit,” she explained. “We run our firm across a distributed geography, we have virtual and in-person, but we are really strong on our culture, so that piece is an important first step. After that, there’s a lot of intention about depth of expertise serving a client need.”