By Ramone Param, Associate Director, Market Intelligence & Buyer Coverage, Equiteq.
Oracle reportedly exploring Accenture acquisition bid
According to a report by The Register, Oracle has hired consultants to conduct due diligence research on acquiring Accenture. Accenture is a major Oracle partner, while Oracle has a material services business which operates alongside its software offering. The combination would significantly enhance both companies position in their respective markets, creating a leading provider of end-to-end digital transformation products and services.
A deal with Accenture would follow Oracle’s recent acquisition of NetSuite for $9.3bn and its acquisition of PeopleSoft in 2005 for $10.3bn. With Accenture’s market cap at over $77bn, the deal would be by far its largest acquisition to date.
Oracle has been focusing on its cloud business, but is still considered to be behind market leaders Amazon Web Services, as well as Microsoft, Google and IBM. Following reports of the deal, Accenture’s stock fell, with some equity analysts raising concerns about the deal’s implications for Accenture’s independence and the risks to Accenture’s strong relationships with Oracle’s competitors like SAP, Salesforce, ServiceNow and Workday.
Advisory Board considers merger with Evolent Health
According to Reuters, The Advisory Board is exploring a merger with Evolent Health, a company it part founded in 2011. Evolent is believed to have held talks with private equity firms about getting financial backing for an offer.
Washington D.C.-based Advisory Board provides technology systems, research and consulting services for physicians and hospitals, as well as to the higher education sector. The news follows The Advisory Board’s announcement last month that it was considering strategic alternatives, including a potential sale, after a challenging second half of last year. Press Ganey is believed to have expressed interest in the company. Activist investor Elliot Management also paid c.$84m for an 8.3% stake in the business earlier in the year, but recently agreed not to launch a takeover.
Tech Mahindra buys CJS, as Indian IT buyers shop for US acquisition targets
Indian IT services giant Tech Mahindra acquired US-based healthcare IT consulting firm CJS for $110m, implying a c.1.0x LFY revenue multiple for the business. The deal will be structured with an upfront payment of $89.5m for 84.7% of the business, with the remainder paid over three years.
CJS operates as the HCI Group and helps healthcare organizations plan, implement and sustain enterprise information technology systems. Healthcare and life sciences accounts for c.7% of Tech Mahindra’s revenues and has been a key focus for the buyer.
The deal is also considered to represent an increase in acquisition interest for US firms with local staff from Indian IT buyers, ahead of expected tightening of H-1B visa rules. Many overseas IT firms rely upon current visa regulations to fly engineers and developers to the US to provide services to clients.
Huron continues its buying streak with its acquisition of Innosight
Huron has completed its acquisition of Innosight, a growth strategy consulting firm focused on helping clients navigate through disruptive change, strategic transformation and enabling innovation. The deal includes a payment of $90m in cash and $10m in Huron common stock, plus a $35m payment over a four-year period in additional potential earn-out.
Huron has grown rapidly through acquisitions, with a focus on expanding into healthcare, which is now believed to represent over 60% of its business and technology practice. Other deals in the sector includes its acquisitions of MyRounding and HSM. The buyer also recently acquired ADI Strategies, which will be used to create one of the largest and fastest growing Oracle application and analytics practices in the U.S.
KKR and CDPQ acquire USI
KKR & Co and Canadian pension-fund CDPQ announced plans to acquire USI Insurance Services from Canadian private equity firm, Onex Corp. The deal values USI at $4.3bn, implying a revenue multiple of c.4.3 times.
USI provides property and casualty, employee benefits, personal risk and retirement solutions. The deal is the largest in the insurance brokerage and consulting space since the merger of Towers Watson and Willis last year.
Private equity firms have been active investors in such companies and prior to this deal, USI’s current owner Onex had acquired the business from Goldman Sachs’ private equity arm.
Selected Consulting M&A Deals in March:
Note 1: Based on latest revenue estimates.
Note 2: Based on 2016 revenue estimates from PitchBook.
Important Notice: This article has been compiled using our daily activities in the industry that provide us with unique market intelligence, along with various third party information sources. In many cases, valuation metrics and other deal data has not been confirmed.
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