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

By Ramone Param, Director, Equiteq

  • Major deals profiled include Cognizant’s acquisition of Mustache, PA Consulting’ acquisition of We Are Friday and Accenture’s acquisition of Knowledgent.
  • Equiteq advised LightStream Analytics on its sale to ABeam Consulting.
  • The Equiteq Knowledge Economy Share Price Index declined along with broader market indices.

Cognizant acquires creative agency Mustache after another strong year of deal flow for the prolific buyer.

Target: Mustache is a US-based content creation agency that provides video production and marketing services with a focus on developing integrated advertising campaigns for blue-chip clients.

Buyer: Cognizant is a US-headquartered global technology services firm.

Deal Insight: Cognizant stepped up its deal flow across digital capabilities following a lull in activity in 2015. In its debut appearance, Cognizant Interactive was named among the top of Ad Age’s Agency Report 2018 rankings. The acquisition of Mustache adds strong content specialist capabilities and develops Cognizant Interactive’s digital content services to better position it against competitors like Accenture Interactive and Deloitte Digital. The transaction builds on Cognizant’s acquisition of Softvision for $550m in October. Softvision is a provider of end-to-end digital products and solutions with experience in developing video-streaming platforms.

PA Consulting acquires digital and innovation agency We Are Friday in its third deal of 2018.

Target: We Are Friday is a UK-based digital service design and engineering agency.

Buyer: PA Consulting is a UK-headquartered global innovation and transformation consultancy with backing from private equity investor The Carlyle Group.

Deal Insight: Since its investment from Carlyle in 2015, PA Consulting has acquired four businesses, three of which were purchased in 2018. Its latest acquisition of We Are Friday adds digital service design and engineering capabilities to its UK innovation business. The deal followed its acquisition of US-based innovation strategy and product design agency Essential Design in October and UK-based digital customer insights and strategy consulting firm Sparkler in May. PA Consulting’s inorganic growth has also been matched by organic expansion. This includes the announced creation of 400 jobs in Belfast over the next five years as part of a major government-backed expansion of its digital team.

Accenture further expands its data management capabilities with the acquisition of Knowledgent

Target: Knowledgent is a US-based AWS Advanced Consulting Partner that provides digital transformation and cloud migration services with a specialism in data intelligence. The business employs 200+ people that offer data strategy and architecture, data engineering, and data management services.

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

Deal Insight:  Accenture ended 2018 with another year of strong deal activity across hot digital capabilities like artificial intelligence and data analytics. The acquisition of Knowledgent expands Accenture’s offerings in a variety of spaces that prolific strategic buyers are experiencing talent shortages. This includes the rapidly growing areas of AWS Consulting and machine-led data analytics. Demand for advanced data analytics capabilities continues to be strong as data management remains core to the latest digital transformation initiatives organizations are undertaking across industries. The acquisition of Knowledgent follows Accenture’s acquisition of advanced data analytics businesses Kogentix in July.

Selected Knowledge Economy M&A announced in December:

Equiteq Knowledge Economy Share Price Index:

Are you a member of Equiteq Edge? It’s full of content to help owners of knowledge-intensive services companies prepare for sale and sell their businesses. Register here to gain full access.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.