The following summarizes our five key predictions for business owners in 2019 as discussed in our recently released Knowledge Economy Outlook paper.
1. Economic and political uncertainties will create opportunities for agile consulting companies to develop solutions that can help mitigate the current business risks facing their clients.
In 2018, the Equiteq Knowledge
Economy Share Price Index posted its biggest decline since 2008. This mirrored
weak performance across broader market indices. After a highly volatile end to
the year, we commence 2019 with increased equity market uncertainty led by a
range of political and economic risks. Against this backdrop, consulting
business owners will need to be aware of the opportunities to position their
organizations appropriately in 2019.
Major deals profiled include DXC’s
acquisition of Luxoft, Bain Capital’s acquisition of Brillio and IBM’s reported
acquisition of T-Systems’ mainframe service business.
Equiteq advised Orbium on its sale to Accenture
and Cervello on its sale to A.T. Kearney.
The Equiteq Knowledge Economy
Share Price Index experienced rises along with broader market indices.
acquisition of Luxoft builds new digital capabilities and sector vertical
Target: Luxoft is a global
provider of technology solutions, including software development services.
Buyer: DXC Technology
is a US-headquartered global IT services firm.
Deal Value: $2bn (2.2x TTM Sep-18 revenue)
Deal Insight: DXC Technology was formed in 2016 following the merger of HPE’s spin-off of most of its enterprise services business with Computer Sciences Corporation (CSC). Since its formation, DXC has been highly acquisitive and has announced notable deals across technology and consulting, including the acquisitions of:
Tribridge and Logicalis SMC in 2017; and
System Partners, Molina Medicaid Solutions and argodesign in 2018.
DXC’s acquisition of Luxoft is a transformational
deal for the firm. It provides DXC with important capabilities in outsourced
digital engineering, cloud and devops. It also enables DXC to deepen its
capabilities for clients in the automotive and financial services sector
verticals, particularly in Europe. At the end of January, DXC also announced its
acquisition of EG A/S, a Microsoft consulting firm with a strong presence across
We have released a summary of our
detailed review of data analytics consulting M&A and investor trends for
owners of businesses across the knowledge economy.
At the core of the Fourth Industrial
Revolution is the fusion of big data, advanced analytics and new physical
technologies. The key to business success in the new digital age is no longer
being able to simply use data to measure current and past performance. It is
being able to make predictions about the future and quickly prescribe
recommended strategies that can enrich decision making.
From a delivery model perspective, there is pressure on knowledge-intensive services firms to enhance their consulting offering with new data analytics solutions. This same pressure is being felt by consulting firms’ clients, who look to their advisers for assistance in innovating and realizing competitive advantages from new data analytics tools. Across the space in 2018, we found that buyers focused on acquisition targets with proprietary platforms, leverageable IP and managed services solutions.