Artificial Intelligence developments are transforming customer experience

By Ramone Param, Associate Director, Equiteq.

We were pleased to recently attend the Salesforce World Tour in London and Boston, where we listened to speeches from Salesforce President, Keith Block, along with senior members of IBM Watson and Amazon Web Services. These talks focused on the transformation of customer experience as part of the so-called ‘fourth industrial revolution’. This revolution is being characterized by the convergence of cloud, social, mobile and technologies like the Internet of Things (IoT) and Artificial Intelligence (AI).

This trend is notably being observed through the development of eCommerce and smart devices, which now utilize predictive marketing and advanced data analytics. This technology is expected to become increasingly sophisticated with the rapid advances in AI.

Percentage of surveyed companies using or planning to use AI in the following ways

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May 2017: Consulting M&A Update

By Ramone Param, Associate Director, Equiteq.

FIS sells majority stake in Capco to private equity

Clayton, Dubilier & Rice announced their acquisition of a 60% majority stake in Capco from FIS, a leader in financial services technology. Capco is the public brand for FIS’ management consulting business and specializes in business, digital and technology consulting services for the financial services industry. FIS acquired Capco for $292m in 2010 and will receive net cash proceeds of $477m from the sale, while retaining a 40% stake in the business.

New Mountain acquires OneDigital Health and Benefits

OneDigital, one of the top buyers that we identified in the HR space, announced that it has been acquired in an all-cash deal by private equity investor New Mountain Capital. New Mountain is acquiring a majority ownership in the business from Fidelity National Financial Ventures for a reported $560m. The investment will be aimed at providing strategic guidance and industry expertise, while helping drive OneDigital’s continued growth.

OneDigital is the United States’ largest provider of employee benefits services and offers employers a combination of strategic advisory, analytics, compliance support, HR capital management tools and comprehensive insurance offerings. The business serves 35,000 companies and manages c.$4 billion in premiums.

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The highest price for your consulting business may well come from outside your core industry

The most prolific acquirers of knowledge-led businesses are undergoing unprecedented diversification and convergence across adjacent consulting segments and sectors. At the same time, digital transformation is driving hybrid business models with consulting, technology and managed service revenue. This change is fuelling high levels of M&A activity from trade and private equity investors, which we review in our 2017 M&A report. For owners considering selling their business, an appreciation of these trends is critical to uncovering the synergistic buyers that may offer the highest value.

Convergence between consulting offerings

Global consulting clients are increasingly looking to their advisors for best-in-class, end-to-end consulting solutions. These trends are driving established consulting buyers to use M&A to enter new geographies and acquire complementary capabilities.

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April 2017: Consulting M&A Update

By Ramone Param, Associate Director, Market Intelligence & Buyer Coverage, Equiteq.

SNC-Lavalin acquires Atkins

SNC-Lavalin is acquiring British engineering consultancy Atkins for £2.1bn ($2.6bn). The offer represented a c.35% premium to the undisturbed closing price of Atkins prior to acquisitions talks were announced. As highlighted in our January market update, CH2M had been rumored to be in discussions with Atkins about a possible merger earlier in the year.

The acquisition would boost the Canadian engineering and construction firm’s European revenue as it emerges from a self-imposed freeze on acquisitions in 2015. The deal is expected to expand SNC’s projects outside the energy industry, while oil prices continue to remain significantly below their 2014 levels.

In combination with John Wood Group’s acquisition of Amec for £2.2bn ($2.7bn) last month, the deal represents a consolidation of the UK engineering consulting market, a trend that we anticipated globally in our latest Engineering M&A Report.

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International firms tap into Asia-Pacific markets with strategic acquisitions of specialist firms

Equiteq’s David Jorgenson and Jean-Louis Michelet met at ESSEC Business School in Singapore to discuss the opportunities and challenges impacting M&A activities in the Asia-Pacific region.


In this blog, the final part of their discussion, they both explore the huge opportunities for knowledge-driven services businesses in the Asia-Pacific region.

Simply put, there are massive opportunities in Asia-Pacific for knowledge-driven B2B services companies. While most of the region’s services markets are not as advanced as in more developed economies in Europe and North America, globalization and technological revolution are driving international demand for specialist businesses in Asia-Pacific.

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Equiteq’s tenth annual review of the global consulting M&A market highlights that deal activity has reached a nine-year high

By Ramone Param, Associate Director, Market Intelligence & Buyer Coverage, Equiteq.

The Equiteq Global Consulting M&A report is the most comprehensive publicly available study of the knowledge-intensive services industry.

The review covers deal activity and equity market trends across fives consulting segments: Management Consulting, IT Services, Media Agencies, Engineering Services and Human Resources. Equity market trends are analyzed through the Equiteq Consulting Share Price Index, the only published share price index for the industry.

Strong deal activity

In 2016, the number of completed transactions in the consulting sector nudged up to reach a nine-year high. This was in spite of the restraining influences of slowing growth in global GDP, the UK’s vote to Brexit and the US Presidential election, which caused a slowdown in the preceding quarters. Activity from both strategic and financial buyers swiftly bounced back, and the year ended with conviction and momentum that has carried into 2017.

The top consulting segments for deal activity were the rapidly evolving Management Consulting, IT Services and Media Agency segments.

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H1-B visa reforms could drive an acquisition spree from Indian IT Services firms

By Ramone Param, Associate Director, Market Intelligence & Buyer Coverage, Equiteq.

Earlier this week, the US Citizenship and Immigration Services (USCIS) announced that it would take a more targeted approach to site visits of H-1B requesters and issued guidance that entry-level computer programmer positions could not be presumed specialty occupations, a requirement for the issue of a H1-B. The Justice Department also issued a press release cautioning employers petitioning for H-1B visas to not discriminate against American workers. There is an expectation that an executive order will also be introduced to call for a further review of the H-1B work visa.

Indian IT Services firms expected to face increasing pressures from H1-B reforms

The tightening of U.S. visa rules under the new administration is expected to place increasing pressures on costs for the Indian IT outsourcing industry. Over 60% of the industry’s export revenue comes from the U.S. and this work is dependent on cheap non-American coders and engineers. These workers will typically use H1-B visas to work locally, while getting paid a lower wage as compared with local non H1-B employees. Although the H1-B visa system works via a lottery system, Indian outsourcers are considered to be the top recipients of these visas, with some believed to be using loopholes, such as filing multiple applications for individual workers, which are not available to smaller companies.

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