Blucora, an Irving, Texas, wealth management provider focusing on tax strategies, has announced its acquisition of registered investment advisor HK Financial Services (HKFS) for about $160 million in stock.
The transaction, which adds $4.4 billion in client assets to Blucora, is expected to close by March 31.
HK Financial Services is an affiliate of Dubuque, Iowa-based Honkamp Krueger & Co. (FY18 net revenue of $80.2 million), an IPA 100 firm. HKFS partners with 75 CPA firms to provide wealth management services to 4,100 clients. The firms are expected to benefit from software called Tax-Smart Investing to better serve clients and ultimately, increase revenue. HKFS employs about 100 people, 70 of whom work in Dubuque.
Louie Rosalez, president of HKFS, says, “Blucora embodies our mission to take a holistic approach to serving our clients’ wealth management needs, and is the ideal partner for HKFS.”
HKFS offers asset management, business retirement planning and insurance services. Blucora plans to augment these services with estate planning and trusts.
Blucora president and CEO John Clendening says the acquisition will give CPA firms, advisors and clients additional capabilities and choices, while Blucora’s Avantax Wealth Management advisors get new opportunities for growth, among other advantages. As part of its rationale for the acquisition, Blucora points to HKFS’ retirement plan services for small-business clients.
The arrangement comes nearly a year after Blucora announced it would buy 1st Global for about $180 million in stock. Since then, Blucora, the parent company of HD Vest and the software maker TaxAct, brought together HD Vest and 1st Global wealth management divisions and rebranded them as Avantax Wealth Management, with a focus on tax-planning advice.
Blucora anticipates that HKFS will operate as a third division of Blucora, in addition to Avantax Wealth Management and TaxAct.