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

By Ramone Param, Director, Equiteq

  • Major deals profiled include Accenture’s acquisition of Intrigo, BDO’s acquisition of Moore Stephens LLP and Tata Consultancy Services’ acquisition of BridgePoint.
  • Equiteq advised OEE Consulting on its sale to Webhelp’s gobeyond.
  • The Equiteq Knowledge Economy Share Price Index experienced some volatility over the month along with broader market indices.

Accenture’s acquisition of Intrigo Systems follows other notable investments in the growing digital supply chain space

Target: Intrigo Systems is a US-based SAP Channel Partner that provides consulting and implementation services with a specialism in digital supply chain transformation.

Buyer: Accenture is an Ireland-headquartered global technology services firm.

Deal Insight:  The deal expands Accenture’s offerings around SAP solutions that enable digital supply chain transformations for clients. Digital supply chain consulting is a space that is experiencing notable buyer interest as exemplified by notable recent deals including:

  • Digital transformation buyer Genpact’s acquisition of Barkawi Management Consultants – a digital supply chain consulting firm operating across the US and Europe.
  • IT services buyer Wavestone’s acquisition of Metis Consulting – a French management consulting business that is smaller than Intrigo, but also focused on supply chain transformation.

Supply chain management is a function expected to see increasing digital disruption. Technologies like artificial intelligence, advanced data analytics, cloud and IoT are now enabling improved ways for company’s across industries to manage and transform their supply chain.

BDO’s acquisition of Moore Stephens LLP creates the fifth largest accounting firm in the UK during a time of unprecedented scrutiny for the industry

Target: Moore Stephens LLP is the London, Birmingham, Reading, Bristol and Watford offices of the current Moore Stephens UK accounting network.

Buyer: BDO LLP is an accounting network in the UK that is part of the BDO global network.

Deal Insight:  BDO was the sixth largest accounting firm by revenue in the UK prior to the acquisition of Moore Stephens LLP. The deal will place BDO ahead of Grant Thornton, as the largest accounting network in the region after the Big Four. The transaction comes during a time of increased scrutiny for the industry following government calls for a review of the UK auditing sector after a series of high-profile scandals. The scrutiny is particularly intense for the dominant Big Four, who are facing some calls to be broken up. This is creating an opportunity for mid-tier accounting players like BDO and Moore Stephens to consolidate and take advantage of new client opportunities.

Tata Consultancy Services’ acquisition of BridgePoint forms part of a recent uptick in deal flow from the acquirer

Target: BridgePoint Group is a US-based management consulting firm focused on serving the financial services industry, with a specialism in retirement services.

Buyer: Tata Consultancy Services (TCS) is an Indian-headquartered global technology services and consulting firm.

Deal Insight: The acquisition of BridgePoint follows TCS’ recent acquisition of W12 Studios, a London-based creative agency. These two recent acquisitions are TCS’ first reported purchases of businesses since 2015. The recent uptick in M&A could be due to analyst pressure on TCS to use acquisitions as a tool for growth in line with more acquisitive competitors like Wipro and Infosys.

BridgePoint builds on TCS’ existing strong capabilities within financial services, insurance and retirement services. The deal also provides it with local US-based resources during a time of tightening of visa regulations in the region. Many of the leading Indian outsourcing players rely upon sending engineers and developers on work visas to the US to provide services to clients. These players are now building local resources, including via new domestic hiring initiatives and M&A.

Selected Knowledge Economy M&A announced in November:

Equiteq Knowledge Economy Share Price Index:

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