March 2019: Knowledge Economy M&A and Equity Market Update

By Ramone Param, Director, Equiteq

  • Industry deals profiled include CGI’s offer to acquire Acando, Accenture’s purchase of Enterprise System Partners and Version 1’s acquisition of TE4B.
  • The Equiteq Knowledge Economy Share Price Index was broadly flat over the month.

CGI makes recommended offer to acquire Acando to strengthen its capabilities in Northern Europe.

Target: Acando is an IT and management consulting business headquartered in Sweden.

Buyer: CGI Group is a Canada-headquartered IT services and business consulting firm.

Deal size: $459m (1.5x TTM revenue)

Deal insight:CGI is a global technology services player with a strong model of organic growth and M&A. The buyer has made numerous acquisitions over recent years that have expanded its global consulting and technology capabilities. Its most recent offer to acquire Acando will deepen its presence in Northern Europe adding over 2,100 professionals across the region. The purchase will expand the buyer’s strategic consulting, system integration and digital innovation capabilities. The deal builds on CGI’s €98m acquisition of Affecto in 2017. Affecto is a data analytics business headquartered in Finland.

Accenture acquires life sciences consulting capabilities in another year of expected strong deal flow.

Target: Enterprise System Partners (ESP) is a consulting and manufacturing services provider for the life sciences industry headquartered in Ireland. ESP has notable expertise in manufacturing execution systems and serialization.

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

Deal insight:Accenture’s acquisition of ESP will expand its Industry X.O practice, which helps clients with the digital reinvention of industry focusing on smart, connected products and living technologies. The practice recently acquired software engineering business Pillar Technology, hardware engineering firm Mindtribe and strategic design consulting business Designaffairs. The deal will also strengthen Accenture’s consulting services to the disrupted life sciences sector. This follows the formation of Accenture Scientific Informatics Services after the purchase of LabAnswer in 2017. Accenture remains one of the most prolific buyers across knowledge-intensive services and its recent second quarter 2019 earnings call revealed that the buyer expects to invest up to $1.5bn in M&A for FY2019.

Version 1 doubles its offshore delivery capabilities with acquisition of TE4B.

Target: TE4B is a boutique digital consulting firm headquartered in India.

Buyer: Version 1 is an Ireland-headquartered cloud and digital specialist.

Deal insight: The acquisition of TE4B will add 100 people in Pune and Bangalore bringing Version 1’s headcount to c.1,300. The purchase will also create a second centre of excellence for Version 1 in India, with the aim of expanding its presence in the region. In April 2017, the Irish buyer received an investment of €90m from Volpi Capital to drive organic and inorganic growth into the UK and Europe. In 2018, Version 1 acquired UK-based HR transformation specialist Cedar Consulting and Ireland-based predictive analytics solutions company Presidion.

Selected Knowledge Economy M&A announced in March:

Source: PitchBook, S&P Capital IQ and Company Press Releases

Economy Knowledge Economy Share Price Index

Source: S&P Capital IQ

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