By Ramone Param, Associate Director, Equiteq
Xafinity acquires Punter Southall businesses
Xafinity is acquiring the actuarial, pensions administration and investment consulting businesses of Punter Southall, in a deal valued at £153m. Xafinity provides pensions actuarial advice and administration services to 550 occupational pension funds in the UK. As part of the transaction, it will acquire Punter Southall Limited, Punter Southall Investment Consulting and Punter Southall Administration Limited for a combination of cash and shares. The deal is expected to create the largest pure-play pensions consultancy in the UK, with c.900 employees across the country, that generates over £100m of revenue. After the transaction, Punter Southall’s remaining operations will be focused on workplace savings, health and protection consulting and wealth management.
The deal is set to be the first major acquisition in the investment advisory industry since the Financial Conduct Authority referred the industry to the UK’s competition regulator. The referral is expected to result in new rules that distributes clients of the big three (Aon, Mercer and Willis Towers Watson), while driving consolidation amongst smaller advisers.
PA Consulting expands its services to the aviation sector with acquisition of Nyras
Founded in 2003, Nyras specializes in consulting to the aviation sector, including offering specialist advice on slot transactions, restructuring and fleet management. The firm is the only consultancy authorized by the FCA to provide commercial and transactional advisory services in the air transport industry. Nyras’ clients include leading travel and aviation brands like Aer Lingus, British Airways, Etihad Airways and TUI Travel.
Nyras is PA Consulting’s first reported acquisition since its $1bn buyout by The Carlyle Group in 2015. The acquisition strengthens the innovation and technology consulting buyer’s offering to the aviation sector and follows Accenture’s acquisition of the corporate advisory and aviation consulting businesses of Seabury Group early last year.
CGI acquires business consultancy with strength in health and life sciences and digital transformation projects
CGI acquired commercial business consultancy Paragon Solutions, strengthening its position in the Greater New York, New Jersey and Philadelphia metro markets. The Montreal-headquartered acquirer is the fifth largest independent IT and business consulting services firm in the world. Last Summer, it announced a very active M&A pipeline and notable growth in its US commercial and federal businesses.
The acquisition of Paragon Solutions adds 300 people to CGI’s business and marks its seventh metro market acquisition over the last 15 months. The acquisition adds strong capabilities to CGI’s health and lifesciences consulting business, as well as further expertise in digital transformation and systems integration.
Dentsu Aegis Network’s mcgarrybowen acquires full-service digital marketing agency Swirl
Dentsu Aegis Network agency mcgarrybowen acquired Swirl, the largest independent advertising agency in San Francisco. Founded in 1997, Swirl has strong capabilities in digital and social-first marketing, branded content, and eCRM. The business has a team of over 175 people and has worked with a number of blue-chip clients including Microsoft Stores, eBay, CA Technologies, HTC and Juniper Networks.
According to Ad Age, mcgarrybowen turned itself around in 2016 after struggling in the prior year and received the title of Ad Age’s 2017 Comeback Agency of the Year. In 2016, its revenue grew 4% to $270m and it won a number of high-profile client accounts. Following the transaction, Swirl will be renamed Swirl mcgarrybowen.
Hyundai’s Innocean acquires advertising agency David&Goliath
Innocean Worldwide, the advertising agency of Hyundai Group, is acquiring LA-based David&Goliath. Founded in 1999, David&Goliath works with challenger brands to help them outperform their competition. The agency has an established relationship working with Kia, majority owned by Hyundai.
Hyundai launched Innocean in 2005 to primarily manage its own global communications and marketing business. Some industry commentators expect Innocean to follow a similar path to Samsung’s Cheil Worldwide, which was founded on a similar basis and expanded via acquisition. Innocean’s acquisition of David&Goliath follows its 2015 partnership with Horizon Media to create Canvas Worldwide, a JV advertising agency that works with Hyundai brands and other unassociated clients.
Selected Consulting M&A announced in December:
Note 1: Based on data from PitchBook. Valuation multiple based on FY16 Revenue.
Note 2: Based on data from CapIQ. Valuation multiple based on LTM Revenue.
Equiteq Consulting Share Price Index:
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.