March 2018: Knowledge Economy M&A and Equity Market Update

By Ramone Param, Director, Equiteq

  • Major deals included Apax’ acquisition of Business Integration Partners (Bip), Duff & Phelps’ acquisition of Kroll, Accenture’s acquisition of MXM (Meredith Xcelerated Marketing) and the completion of Altran’s acquisition of Aricent.
  • Equiteq advised Bip on its sale to Apax, c3 consulting on its sale to Ankura and 8works on its sale to Oliver Wyman.
  • The Equiteq Knowledge Economy Share Price Index dipped slightly over the period.

Apax Partners acquires Italian consultancy Bip

Target: Business Integration Partners (Bip) is a Milan-based provider of management consulting and business integration services supporting businesses in disruptive technological innovation.

Buyer: Apax Partners is a global private equity advisory firm. Its funds invest in four sectors: tech & telco, services, healthcare and consumer.

Seller: Argos Soditic is an independent European private equity group.

Deal Insight: Bip was founded in 2003 and received backing from Argos Soditic in 2014. Following the investment, the business grew through a series of acquisitions in Italy and abroad. The business currently employs 1,800 professionals across 11 countries globally.

The acquisition offers Apax significant opportunities for international growth through bolt-on acquisitions. Deal terms weren’t disclosed.

Last Summer, Apax acquired ThoughtWorks, a US-based software development and digital transformation consulting company. Earlier in 2017, Apax also sold its stake in GlobalLogic, a product development services firm focused on next generation products and digital experiences. The business was sold to CPPIB and was believed to have delivered a return of more than three times the original investment over a four-year hold period.

Duff & Phelps acquires investigation services provider Kroll

Target: Kroll is a US-based provider of risk solutions through a range of investigations, cyber security, due diligence and compliance, security and data management services.

Buyer: Duff & Phelps is a provider of valuation, corporate finance and regulatory consulting services.

Seller: Corporate Risk Holdings is a provider of compliance and cybersecurity services.

Deal Insight: Corporate Risk Holdings acquired Kroll in 2010 through its financial sponsors Providence Equity Partners in a $1.13bn acquisition. Duff & Phelps acquisition of Kroll from Corporate Risk is expected to help Kroll expand globally, especially in Europe and Latin America. Deal terms weren’t disclosed.

The acquisition marks Duff & Phelps’ first deal since its investment from private equity firm Permira at the end of 2017. Prior to this LBO, Duff & Phelps had been highly acquisitive, acquiring six businesses in the preceding two years.

Accenture moves deeper into digital marketing with its acquisition of MXM

Target: Meredith Xcelerated Marketing (MXM) is a content-focused provider of marketing, cross-channel strategy consulting and creative execution.

Buyer: Accenture is a global professional services player offering a range of consulting and technology solutions.

Seller: Meredith Corporation is a marketing, advertising, publishing and broadcasting business.

Deal Insight: MXM will strengthen Accenture’s creative, data-led marketing and digital media capabilities. The business currently employs over 450 people across North America and works with major brands like Kraft Heinz, Lowe’s, Volkswagen and WebMD. The acquisition represents Accenture’s continued push into the digital media space, complementing recent deals like SinnerSchrader, The Monkeys and Wire Stone.

Accenture’s digital subsidiary, Accenture Interactive, has been growing rapidly over the last few years through a mixture of M&A and organic growth. The business projected revenue of $6bn in 2017 and now ranks as one of the largest advertising services providers globally according to Bloomberg.

Altran completes acquisition of global design and engineering business Aricent

Target: Aricent is a provider of digital design and engineering services focused on clients in the communications and technology, semiconductor and software sectors.

Buyer: Altran is a US-based global provider of engineering and R&D services.

Seller: KKR is a global private equity firm.

Deal Value: EUR 1.73 bn (3.1x FY17 revenue)

Deal Insight: Altran completed its acquisition of Aricent from KKR after receiving the necessary approvals under the closing conditions that it agreed in November of last year. To help finance the deal, Altran launched a EUR750m rights issue.

The combined business consists of 44,000 people globally and generated almost EUR 3 bn of revenue in FY17. The deal strengthens Altran’s expertise across design, product & system engineering, digital and software. The market for engineering and R&D services is evolving and consolidation is expected to continue as the industry is forecast to reach $220bn by 2020.

Selected Knowledge Economy M&A announced in March:

Equiteq Knowledge Economy 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 unverified data from various third-party information sources.

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