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

  • Major deals profiled include McKinsey’s acquisition of Westney Consulting, Accenture’s purchase of Pragsis Bidoop and Siemens Healthineers’ acquisition of ECG Management Consultants.
  • Equiteq advised Live Rice Index on its sale to S&P Global Platts.
  • The Equiteq Knowledge Economy Share Price Index was broadly flat over the month.

McKinsey strengthens its capital-projects consulting capabilities with acquisition of Westney Consulting.

Buyer: McKinsey is a US-headquartered global management consulting firm serving businesses, governments, and institutions.

Target: Westney Consulting is a US-headquartered capital projects consulting firm.

Deal insight: The acquisition of Westney further strengthens McKinsey’s industry recognized capital projects and infrastructure consulting business. Westney has strong capabilities in energy consulting, enabled by rich data sets. These capabilities have benefited from stabilizing commodity prices, increased infrastructure spend in the US and the rising complexity of new large infrastructure projects.

McKinsey has historically focused on organic growth, while making selective acquisitions in strategically important spaces. Strategic sectors have included digital consulting and data analytics, which are also market segments with acute talent shortages. McKinsey’s acquisitions are typically preceded by a partnership with a target company, which can enable the testing of synergies before agreeing a deal. McKinsey and Westney note a longstanding partnership, where they have worked together on various projects for over 10 years prior to agreeing this transaction.

Accenture continues to build its advanced analytics capabilities with the purchase of Pragsis Bidoop.

Buyer: Accenture is an Ireland-headquartered multinational professional services company.

Target: Pragsis Bidoop is a Spain-headquartered big data, AI and advanced analytics company.

Deal insight: As part of the transaction, Accenture will add over 200 people with machine learning and big data engineering experience to the buyer’s applied intelligence business. The business was recently bolstered by Accenture’s acquisition of Analytics8 last month. Analytics8 was an Australian business specialized in data management, visualization, data science and analytics services. Accenture’s acquisitions of Pragsis Bidoop and Analytics8 highlight the continued demand for advanced analytics consulting capabilities among strategic buyers that are shaping the digital age.

There is pressure on many consulting firms to enhance their 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, we observe buyers being focused on acquisition targets with proprietary platforms, leverageable IP and managed services solutions.

Siemens Healthineers acquires ECG Management Consultants from private equity Gryphon Investors.

Buyer: Siemens Healthineers is a US-headquartered medical technology company.

Target: ECG Management Consultants is a US-headquartered provides specialized strategic, operational, financial, and technology-related consulting services to health systems, hospitals, medical groups and academic medical centers.

Deal insight: Siemens AG launched an IPO of Siemens Healthineers in March last year. The floatation was one of the biggest IPOs in Germany in 2018, as well as one of the largest in the medtech industry worldwide. The acquisition of ECG Management Consultants follows the buyer’s landmark purchase of medtech business Corindus Vascular Robotics for $1.1bn. These deals forms part of the buyer’s strategy 2025, which was outlined last year to bolster its market leadership.

Gryphon Investors acquired ECG in 2014 and has since grown the business with the purchases of NeuStrategy, Eveia Health Consulting and Kurt Salmon’s healthcare business. A confluence of demographic, economic, regulatory and technological drivers are forcing healthcare providers to improve care standards and enable efficiencies. Consulting firms are benefiting from this trend and are seeing further potential from helping clients realize new competitive advantages that will arise from using rapidly evolving technologies. This includes the latest connected devices embedded with the latest artificial intelligence and advanced data analytics solutions.

Selected Knowledge Economy M&A announced in September:

Source: PitchBook, S&P Capital IQ and company press releases

Knowledge Economy Share Price Index

Source: S&P Capital IQ

Note: The Equiteq Knowledge Economy Share Price Index is the average of Equiteq’s five segmental indices and is the only published share price index which tracks the listed companies within the knowledge economy. The index is continually revised to consider new listed companies and to remove businesses that are no longer relevant in each quarter.

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