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

By Ramone Param, Director, Equiteq

  • Major deals profiled include OMERS Private Equity’s acquisition of Alexander Mann Solutions, H.I.G. Capital’s acquisition of Conduent’s US-based HR consulting business and Bain & Co.’s acquisition of FRWD.
  • The Equiteq Knowledge Economy Share Price Index achieved another month of robust gains.

OMERS Private Equity acquires Alexander Mann Solutions, marking the recruiting firm’s fourth private equity buyout

Target: Alexander Mann Solutions is a UK-based provider of workforce solutions meeting its clients’ permanent, contingent and internal mobility requirements through a range of outsourcing and consulting services. Much of its work revolves around helping large businesses to recruit and retain talent.

Buyer: OMERS Private Equity is the private equity arm of OMERS, Canada’s largest defined pension plan.

Deal Value: £820m ($1.1bn)

Deal Insight: The deal marks yet another private equity investment for Alexander Mann Solutions:

  • In 2013 it was acquired by New Mountain Capital through a c.$418m LBO.
  • In 2007 it was acquired by Graphite Capital through a $205m LBO.
  • In 1999 it was acquired by Advent International through a $56m LBO.

Through its string of investments, the business has grown into a global recruiting player with 4,000 talent acquisition and management experts that partner with over 100 clients across 85 countries. The investment from OMERS is expected to enable Alexander Mann to strengthen its sector and regional capabilities, while investing in technology that enhances its offering.

H.I.G Capital acquires former Buck Consultants from Conduent as part of Conduent’s business restructuring

Target: Conduent’s US-based HR consulting and actuarial business was formerly known as Buck Consultants and includes its HR consulting and outsourcing operations in Canada and the UK. These businesses represent c.$278m of Conduent’s 2017 revenue.

Buyer: H.I.G. Capital is a global private investment firm.

Deal Insight: The deal is part of Conduent’s plan to divest non-core assets across their business, which will account for up to $500m in revenue for 2018. Conduent will retain operations connected to their core technology platform business, including HR outsourcing, total benefits outsourcing, BenefitWallet® and RightOpt®.

H.I.G. Capital’s investment in the business follows some relevant major private equity activity last year. This includes Blackstone’s acquisition of Aon’s human resources outsourcing business. The Aon unit processed work benefits for 15% of the US population and was a provider for cloud-based human resources management systems. Blackstone was believed to have prevailed over buyout firm Clayton Dubilier & Rice in an auction for the business. Following the deal, OneDigital, North America’s largest employee benefits-only business, received an investment from New Mountain Capital.

Bain & Co makes its first recent purchase with its acquisition of digital agency FRWD

Target: FRWD is a US-based digital agency with creative, media optimization, data science, and advertising technology teams that create sustainable campaigns for major brands across industries.

Buyer: Bain & Company is one of the leading global strategy consulting firms.

Deal Insight: The transaction marks the first recently announced acquisition by Bain & Co, but follows similar digital consulting deals by its competitors McKinsey and the Boston Consulting Group. Last year, Boston Consulting Group acquired MAYA, a US-based digital agency focused on design and innovation. Shortly after the deal, McKinsey acquired VLT Labs, a Malaysian digital engineering and design services firm. The transactions form a trend of leading management consultants expanding their adjacent digital capabilities, which enable them to take a greater share of the growing digital transformation consulting market.

Selected Knowledge Economy M&A announced in May:

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Equiteq Knowledge Economy Share Price Index:

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Important Notice: We have obtained the information provided in this blog from sources which we believe to be reliable, and we have made reasonable efforts to ensure that it is accurate. However, the information is not intended to provide tax, legal or investment advice. We make no representations or warranties in regard to the contents of or materials provided in this report, and exclude all representations, conditions and warranties, express or implied arising by operation of law or otherwise, to the extent that these may not be excluded by law.

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