One of Cincinnati's fastest-growing companies, and one of the region's largest IT consulting firms, has been acquired by a Chicago-based digital services company.
RoundTower Technologies, the second-largest IT consulting firm in Cincinnati and a perennial entrant on the Courier's Fast 55, has been acquired by Chicago-based Ahead. The acquisition included San Ramon, Calif.-based Kovarus.
Details of the transaction were not disclosed, and it is expected to close by the end of October. The combined firm represents more than $2.1 billion in gross revenues and 1,000 employees.
RoundTower co-founder Stephen West, who created the company with Stephen Power in 2007, told me that Ahead, Kovarus and his own company were all founded around the same time, and were peers and friends in the industry. Fit and culture similarities were a driver of the merger.
"We've had the luxury of comparing notes along the way, and always had conversations about, 'wouldn't it be great to bring these companies together?'" West said. "Those conversations heated up around a year ago."
West said the three firms have complementary technology offerings and distinct enough geographical footprints that by merging they have the potential to become a national player.
West said that Cincinnati will serve as one of the hubs of the combined company, which will operate under the Ahead name.
It's too early to tell what will happen to all of RoundTower's 420 employees, he said, but West anticipates that the company's Cincinnati employment will grow. The executive team is staying on, but their long-term roles and responsibilities will be determined as the three companies work through how they will all fit together.
RoundTower has been named to the Business Courier's Fast 55, a list of Greater Cincinnati's 55 fastest-growing private companies, for 10 years running. It reported $459.8 million in 2019 revenue, a growth of 29% over the past three years.
The company has seen a long and meteoric rise in its revenue, earning $9.1 million in 2008 after its first year in business, more than tripling that to $29.7 million in 2010, and nearly tripling that again to $86 million in 2013.
In a 2017 Courier weekly edition centerpiece, Power attributed the company's growth to a "white-hot" cloud computing market. Its clients, which it does not publicly name for security reasons, include everything from small businesses to Fortune 50 firms.
The name RoundTower comes from the Irish countryside, which is scattered with hundreds of round towers. In times of crisis, like Viking attacks, villagers would store their valuables in the round towers. West and Power founded the company while working in sales at tech firm EMC Corp. and created their own company right at the onset of the Great Recession.
The business grew to encompass data center infrastructure, converged platforms, cloud automation and orchestration, DevOps, data analytics and cyber security.
RoundTower, headquartered in the Kenwood Collection, in early 2019 received a 2.5%, eight-year tax credit with an estimated value of $2.5 million from the state of Ohio with a pledge to create 128 full-time jobs. At that time the company had about 410 total employees, with 180 based in the Cincinnati region.
As the coronavirus pandemic devastated all areas of the global economy, RoundTower received a Paycheck Protection Program loan in a range of between $5 million and $10 million to secure 419 jobs.
Ahead announced the acquisition weeks after private investment management firm Centerbridge Partners said it was purchasing a majority stake in the Chicago firm, with the goal of accelerating Ahead's ability to make acquisitions like RoundTower and Kovarus.
RoundTower and Korvus are the latest in a streak of acquisitions by Ahead over the last 15 months, which include:
- Acquiring Link Solutions in July 2019
- Merging with Data Blue and acquiring Sovereign Systems in late 2019
- Acquiring Platform Consulting Group at the beginning of 2020
