Consulting M&A Activity and Equiteq Consulting Share Price Index Performance
By Ramone Param, Market Insights & Buyer Coverage Associate, Equiteq.
In November, we continued to observe strong deal activity amongst prolific IT services buyers such as Accenture, Cognizant and CGI Group. This month’s sale of AlixPartners by CVC Capital Partners also marked one of the largest private equity exits within the consulting industry. With respect to equity market performance, U.S.-based listed consultants tracked within the Equiteq Consulting Share Price Index have rallied following the Presidential election result. This is expected to be reflective of hopes amongst many investors of an improved business outlook in the U.S. stemming from future fiscal stimulus plans, corporate tax rate reductions and regulatory reforms.
CVC Capital Partners agreed to sell its stake in AlixPartners to company founder Jay Alix, as well as to investment firms: Caisse de dépôt et placement du Québec, Public Sector Pension Investment Board and Investcorp Group. The deal values AlixPartners at over $2.5bn and implies a current year revenue multiple of approximately 2.5x.
“We are delighted to welcome CDPQ, PSP Investments and Investcorp as long-term shareholders. Their commitment will allow us to continue to grow our business and best serve our clients.”
Simon Freakley, Chief Executive Officer of AlixPartners
“We are delighted to have played a part in AlixPartners’ growth over the last four and a half years. The firm has evolved into a leading, global advisory business that delivers significant value for its clients.”
Chris Stadler, Managing Partner at CVC Capital Partners
Since Jay Alix founded the business in 1981, AlixPartners has grown into one of the top consultancies focused on bankruptcy and restructuring financial advisory, and has received backing from different private equity firms during its recent expansion. CVC acquired a majority stake in AlixPartners from Hellman & Friedman in 2012 for over $1bn. Hellman & Friedman had previously invested in a majority stake in AlixPartners for $800 million in 2006.
This month, Accenture made three notable acquisitions, which included:
- Karmarama, believed to be the third largest U.K.-based independent advertising agency by billings that works with many high-profile clients including Unilever, Honda and Deutsche Bank.
- Nashco Consulting, a leading Canada-based provider of consulting, design and implementation for ServiceNow.
- Realworld OO Systems, a Netherlands-based specialist in geographic information system (GIS) solutions.
Optiv Security, majority owned by The Blackstone Group, filed for an initial public offering (IPO) earlier in the month. This leading US-based cyber security business was created following the merger of Accuvant and FishNet Security in 2015. Optiv was believed to have generated $947.3m of revenue last year and serves numerous leading Fortune 100 blue-chip clients using a vendor-agnostic services model. The IPO launch follows rumors earlier in the year that the business was preparing to go to public, while concurrently exploring a sale.
We were delighted to advise HS2 Solutions, Inc. (HS2), a full-service digital transformation agency offering a broad range of strategy, experience design, development, analytics, and marketing execution services to help clients address their digital priorities, on an investment from Mountaingate Capital, a Denver-based private equity firm.
Selected Consulting M&A Deals Announced in November:
JBA Consulting Engineers Joins Forces with NV5 Global
Deal Size: Undisclosed Industry: Engineering Consulting Date: November 01, 2016, Target Location: U.S.
World leading engineering and design firm, JBA Consulting Engineers, Inc., has announced that it has been acquired by NV5 Global, Inc., a provider of professional and technical engineering and consulting solutions.
According to JBA, clients will benefit from expanded services under the NV5 umbrella including access to 1,300 professional in 60 offices worldwide.
Accenture Acquires Realworld OO Systems B.V.,
Deal Size: Undisclosed Industry: Cyber Security Date: November 01, 2016 Target Location: Netherlands
Accenture (NYSE:ACN) has acquired Realworld OO Systems B.V., a Netherlands-based division of Realworld Holding B.V. that specializes in geographic information system (GIS) solutions. These solutions help utilities digitize and optimize their electricity, water and natural gas networks. The transaction will expand Accenture’s end-to-end portfolio of smart grid services and accelerate its plans to grow digital consulting services in Europe.
CBIZ Acquires The Seff Group, P.C.
Deal Size: Undisclosed Industry: Professional Services Date: November 02, 2016, Target Location: U.S.
CBIZ announced that it has acquired the non-attest business of The Seff Group, P.C., based in Denver, Colorado, effective November 1, 2016. Founded in 1990, The Seff Group has annual revenues of approximately $4.2 million. It provides full-service accounting, tax, compliance and financial consulting services to closely held businesses, their owners and related entities, to high-net-worth individuals and family groups, and to trusts and estates.
IBM to Acquire Sanovi Technologies
Deal Size: Undisclosed Industry: IT Consulting Date: November 02, 2016, Target Location: India
IBM, a US-based information technology (IT) company that provides business, technology and consulting services, has a signed definitive agreement to acquire Sanovi Technologies Pvt., Ltd., an Indian provider of cloud recovery, cloud migration, business continuity software. Pursuant to the transaction, IBM plans to integrate the Sanovi capabilities into the IBM Global Technology Services unit. The acquisition is expected to close by December 31, 2016.
Avaus to Acquire Swedish Analytics and Data Consultancy Actionbase
Deal Size: Undisclosed Industry: IT Consulting Date: November 03, 2016, Target Location: Sweden
Avaus Marketing Innovations will expand its rapidly growing business operations in Sweden. The company entered the Swedish market in 2014. By acquiring the Swedish company Actionbase, Avaus will strengthen its position as the Nordic leader in data-driven marketing.
K·COE ISOM Acquires SBM
Deal Size: Undisclosed Industry: Professional Services Date: November 03, 2016, Target Location: U.S.
Turlock-based, CA, CPA firm Schmidt, Bettencourt & Medeiros, LLP (SBM) is acquired by K·Coe Isom, the nation’s leading business consultants and CPAs in food & agriculture. Michael Schmidt and Carol Medeiros become principals of K·Coe Isom, and 18 SBM team members are now K·Coe Isom employees. Turlock becomes the sixth California location for K·Coe Isom, with five other offices spanning from Fresno to Redding.
Terracon Acquires Geotechnical Consulting & Testing Inc.
Deal Size: Undisclosed Industry: Engineering Consulting Date: November 03, 2016, Target Location: U.S.
Terracon, a leading provider of environmental, facilities, geotechnical, and materials services, announces the establishment of its first Virginia office locations through the acquisition of Geotechnical Consulting & Testing Inc. (GC&T), headquartered in Woodbridge, with a laboratory in Dulles.
White Wolf-backed CSI buys Nuss Group
Deal Size: Undisclosed Industry: Digital Media Date: November 04, 2016, Target Location: U.S.
CSI IT LLC, which is backed by White Wolf Capital LLC, has acquired The Nuss Group Inc. No financial terms were disclosed. Based in Philadelphia, Nuss Group is a provider of consulting services focused on workforce management systems.
CGI acquires Boston-based Collaborative Consulting
Deal Size: Undisclosed Industry: Engineering Date: November 04, 2016, Target Location: U.S.
CGI Group, a leading provider of information technology and business processing services, announced that it has completed the acquisition of Collaborative Consulting, through its wholly-owned U.S. subsidiary, CGI Technologies and Solutions Inc. With a head office in Boston, MA and nearly 400 professionals.
Navigant Takes Over Ecofys
Deal Size: Undisclosed Industry: Energy Date: November 05, 2016, Target Location: U.S.
Navigant today reported it had acquired Dutch consultancy Ecofys. According to Navigant, the acquisition further strengthens and expands its position in the global energy consultancy market.
RLH Equity Partners Announces Investment in U-Tegration
Deal Size: Undisclosed Industry: IT Consulting Date: November 08, 2016, Target Location: U.S.
Riordan, Lewis & Haden (RLH) is pleased to announce an investment in U-Tegration LLC, a fast-growing provider of consulting, customization, and implementation solutions to the utility industry. The Company helps its clients to substantially upgrade their systems for customer billing and service and to improve the software infrastructure that manages the utility’s network of advanced meters at customer locations.
W2O Group acquires healthcare-focused consultancy Marketeching Solutions
Deal Size: Undisclosed Industry: IT Consulting Date: November 08, 2016, Target Location: U.S.
W2O Group has announced the acquisition of Marketeching Solutions, a leading research and social listening consultancy. Founded in 2008 by Kevin Johnson, the US-based consultancy is focused on healthcare and life sciences and combines traditional and online data analytics methodologies and approaches, working with market researchers, digital centres of excellence and brand marketers.
Accenture Acquires Nashco Consulting
Deal Size: Undisclosed Industry: IT Consulting Date: November 09, 2016, Target Location: Canada
Accenture (NYSE: ACN) has acquired Nashco Consulting Ltd., a Canada-based company that provides consulting, design and implementation services for ServiceNow®. The acquisition further strengthens Accenture’s position as a leader in the ServiceNow partner ecosystem and enhances the company’s technology capabilities and deep industry experience in cloud strategy, implementation, integration and management for clients seeking to tap the As-a-Service economy. http://newyork.citybizlist.com/article/386355/accenture-acquires-nashco-consulting
Arthur J Gallagher buys employee benefits consultancy, Argentis
Deal Size: Undisclosed Industry: Professional Services Date: November 10, 2016, Target Location: U.K.
Arthur J. Gallagher has bought London-based employee benefits consultant and financial planner Argentis for an undisclosed fee. Founded in 2005, Argentis provides benefit and wealth management services to private and corporate clients throughout the UK. It specialises in corporate employee benefits consulting and individual wealth management services, including investment solutions, executive pensions, estate planning, insurance protection and retirement planning.
NCC Group buys Boston-based Virtual Security Research
Deal Size: $6M Industry: Cyber Security Date: November 11, 2016, Target Location: U.S.
NCC Group has acquired Boston-based information, network and application security consultancy Virtual Security Research for up to $6m in cash. Cyber security and risk mitigation company NCC said the amount comprises an initial payment of $4m and two further annual payments of up to $1m each, dependent on performance-related targets.
AlixPartners eyes next phase of growth with new ownership structure
Deal Size: $2.5bn Industry: Restructuring Date: November 14, 2016, Target Location: U.S.
Jay Alix, founder of AlixPartners, has joined forces with three investors to acquire the firm from CVC Capital Partners, the private equity group that bought the global management consultancy four years ago. As part of the change of ownership – the transaction values the consulting firm at more than $2.5 billion – AlixPartners has drafted ambitious growth plans for the years to come.
Booz Allen to Acquire Aquilent to Strengthen Technology Capabilities
Deal Size: $250M Industry: Professional Services Date: November 29, 2016, Target Location: U.S.
The management consulting giant Booz Allen Hamilton is acquiring Aquilent, a Laurel firm that has designed more than 100 websites for federal agencies, in a $250 million deal. The acquisition, subject to regulatory approval, is expected to close by the end of December. It is expected to boost McLean, Va.-based Booz Allen’s revenue by up to $35 million in fiscal 2017.
Accenture Acquires U.K. Creative Agency Karmarama
Deal Size: Undisclosed Industry: Media Date: November 29, 2016, Target Location: U.K.
Accenture has acquired independent U.K.-based creative agency Karmarama as consultancies and ad agencies continue to tread on each other’s turf. The creative shop, comprised of over 200 people, touts clients like the BBC, Honda, Just Eat and Unilever. Karmarama, which was founded in 2000 and received backing from Phoenix Equity Partners in 2011, is the latest in a series of acquisitions that Accenture has made “to rapidly scale” its “customer experience” offerings, the company said in a statement.
Cognizant to Acquire Digital Marketing and Customer Experience Agency Mirabeau BV
Deal Size: Undisclosed Industry: IT Consulting Date: November 29, 2016, Target Location: Netherlands
Cognizant announced that it has entered into a definitive agreement to acquire privately-held Mirabeau BV, a digital marketing and customer experience agency specializing in industries such as travel and hospitality, financial services, retail, and B2B sectors. The acquisition will expand Cognizant’s digital business capabilities in the Netherlands and across Europe. The terms of the transaction were not disclosed.
PwC acquires Dubai-based NSI DMCC
Deal Size: Undisclosed Industry: IT Consulting Date: November 29, 2016, Target Location: Dubai
PwC, one of the leading professional services firms announced on Monday it has entered into an agreement to acquire NSI DMCC, an industry-pioneering technology consulting firm headquartered in Dubai. The acquisition of NSI will complement PwC’s digital transformation capabilities and enhance its ability to deliver innovative solutions across all channels, platforms and devices.
Mountaingate Capital acquires HS2 Solutions
Deal Size: Undisclosed Industry: Digital Media Date: November 30, 2016, Target Location: U.S.
Founded in 2003 by Phil Hollyer and Keith Schwartz, HS2 has enjoyed outstanding growth since inception and has earned a reputation for exceptional client service delivery across the full spectrum of marketing technology platforms and through custom development for eCommerce, web, and mobile applications.
Important Notice: This blog has been compiled using our daily activities in the industry that provide us with unique market intelligence, along with various third party information sources.
Are you a member of Equiteq Edge? It’s full of content to help consulting firm owners prepare for sale and sell their business. Register here to gain full access.