Dartmouth Partners received investment from Literacy Capital
The NAV People management buy-out by FPE Capital
c3/consulting sold to Ankura
Business Integration Partners (Bip) received majority investment from Apax Partners
Equiteq has had a very busy start to 2018 across our global business and this positive momentum is carrying into the summer. As I arrive back in New York from a series of meetings with our regional business leads in Europe and Asia, it is clear that activity in our sector remains robust and acquisition remains a critical component of the growth strategy for industry players. Recent data from Thomson Reuters indicates that global M&A across industries hit record levels in the first half of the year driven by a strong global economic outlook and record levels of capital available for deals.
We have completed transactions for a range of clients operating in the disruption zone of the rapidly transforming knowledge economy. We are also excited to commence work with a range of new clients that consider the current market conditions to be optimal for commencing an exit of their knowledge-intensive services business. In this blog we highlight our recent transaction advisory work which resulted in successful sale outcomes for our clients.
Major deals profiled include Ankura’s acquisition of Navigant Consulting’s DFLT and TAS businesses, Warburg Pincus’ acquisition of Capita’s Supplier Assessment Services business and Capgemini’s acquisition of Adaptive Lab.
Equiteq advised The NAV People on its sale to FPE Capital and Dartmouth Partners on its investment from Literacy Capital.
The Equiteq Knowledge Economy Share Price Index declined over the month led by falls in the share prices of listed management consulting players.
Madison Dearborn-backed Ankura acquires significant chunk of Navigant Consulting
Target: Navigant Consulting’s global business segments offering Disputes, Forensics and Legal Technology (DFLT) and Transaction Advisory Services (TAS). Navigant is a listed global management consulting firm.
Buyer: Ankura Consulting Group is a US-based business advisory and expert services firm that is backed by private equity firm Madison Dearborn Partners.
Deal Value: $470m (1.5x FY18 revenue)
Deal Insight:Ankura received $100m of development capital from Madison Dearborn Partners in March 2016. Since this investment, Ankura has grown rapidly, announcing four acquisitions prior to this transaction with Navigant. Earlier this year, Ankura notably acquired management consulting firm c3/consulting, which expanded its strategy and operational consulting capabilities across the United States. Its acquisition of Navigant’s DFLT and TAS businesses is Ankura’s largest deal to date and is a significant opportunity to establish its global footprint.
The divestitures to Ankura focuses Navigant’s operations on management consulting and managed services across high-growth industry verticals, including energy, financial services, and healthcare. Navigant realizes c.$370m in net proceeds after tax and transaction-related expenses. Some of these proceeds will be allocated to organic growth and strategic M&A opportunities, which are likely to be focused on building Navigant’s digital solutions.
Published today, Equiteq’s healthcare and life sciences consulting global M&A report provides exclusive acquisition and valuation insights for consulting firm owners considering a sale. The data reviews M&A, investor and equity market activity in 2017, as well as over the last ten-years. Our unique insights are informed by our regular detailed conversations with the leading serial acquirers of healthcare and life sciences consulting businesses. The following is a brief overview of the key themes from the report, the full version of which can be found here.
Healthcare M&A activity at a glance
371 completed deals in 2017, down 12% year-on-year
Median deal value of $21m, up 14% year-on-year
24% of deals were cross-border
The Equiteq Healthcare Consulting Share Price Index rose28%, while the S&P 500 gained 18%
There were large variations in deal flow among healthcare consulting segments, with stronger activity occurring in spaces like data & analytics and strategy consulting to life sciences companies. The number of completed deals fell, but the median size of transaction rose substantially, indicating that buyers were focused on a smaller number of larger deals.
M&A activity is strong for specialized operational management consulting businesses that provide innovative, data-driven process improvement and cost reduction solutions
We continue to receive feedback from the most prolific buyers of knowledge-intensive services firms that expertise in helping healthcare providers with process improvement and operational efficiency is of high strategic importance for growth. A confluence of demographic, economic and regulatory drivers are forcing providers to improve care standards and enable efficiencies. Providers are also increasingly being compelled to invest in new digital technologies that can create data-driven productivity improvements and competitive advantages. These industry trends are driving strong demand and premium valuations for well-positioned operational consulting firms working with healthcare providers. Equiteq experienced this demand first hand in its sale of c3/consulting to Ankura. c3 has a track record of providing management consulting services to a variety of leading healthcare organizations in the US.
The General Data Protection Regulation (GDPR), implemented May 25th, has introduced a range of new compliance and legal requirements for businesses across all sectors and industries, mainly the need to be accountable with personal data.
Equiteq, with insights from Bart Schermer of Dutch consultancy Considerati, examine the ways professional services consulting firms can turn the compliance burden posed by GDPR into a competitive advantage.
Major deals profiled include OMERS Private Equity’s acquisition of Alexander Mann Solutions, H.I.G. Capital’s acquisition of Conduent’s US-based HR consulting business and Bain & Co.’s acquisition of FRWD.
The Equiteq Knowledge Economy Share Price Index achieved another month of robust gains.
OMERS Private Equity acquires Alexander Mann Solutions, marking the recruiting firm’s fourth private equity buyout
Target: Alexander Mann Solutions is a UK-based provider of workforce solutions meeting its clients’ permanent, contingent and internal mobility requirements through a range of outsourcing and consulting services. Much of its work revolves around helping large businesses to recruit and retain talent.
Buyer: OMERS Private Equity is the private equity arm of OMERS, Canada’s largest defined pension plan.
Deal Value: £820m ($1.1bn)
Deal Insight:The deal marks yet another private equity investment for Alexander Mann Solutions:
In 2013 it was acquired by New Mountain Capital through a c.$418m LBO.
In 2007 it was acquired by Graphite Capital through a $205m LBO.
In 1999 it was acquired by Advent International through a $56m LBO.
Through its string of investments, the business has grown into a global recruiting player with 4,000 talent acquisition and management experts that partner with over 100 clients across 85 countries. The investment from OMERS is expected to enable Alexander Mann to strengthen its sector and regional capabilities, while investing in technology that enhances its offering.
Buyers are paying premiums for specialized strategy consulting businesses that provide impactful product commercialization solutions for life sciences companies
Based on our in-depth discussions with global buyers and the recent flurry of M&A activity, acquisition demand for life sciences strategy consultancies is exceptionally high. Recent landmark acquisitions by both strategic and financial buyers were struck at premium valuation levels – and as the supply of high-quality acquisition targets continues to dwindle, valuation levels of independent consultancies of scale could rise even further.
Those in marketing communications (marcoms), understand the value in delivering a clear message to the right audience, in the right way, and at the right time. The developments seen in the health and life sciences sector in recent years have created significant demand for marcoms services. Expertise range from the design of patient portals for health care providers, to effective and compliant strategies for pharmaceuticals and data-informed messaging for self-managed care devices.
Marcoms agencies that have adapted well against this transformative backdrop have seen high demand for their services and, in some cases, their entire business.
Here we look at the current challenges marketing and communication firms are tackling for clients in the health sector, as well as the opportunities for specialist agencies looking for acquirers or Private Equity investment.
Major dealsprofiled include Infosys’ acquisition of WONGDOODY, HPE’s acquisition of RedPixie and Wavestone’s acquisition of Xceed.
The Equiteq Knowledge Economy Share Price Indexachieved robust rises over the period.
Infosys deepens its creative agency skills with WONGDOODY
Target: WONGDOODY is a US-based creative agency with studios in Seattle and Los Angeles providing strategy, research, brand and marketing positioning, creative design, advertising and production services across industries.
Buyer:Infosys is a global listed technology services player headquartered in India.
Deal Value: $75.0m
Deal Insight:This transaction exemplifies two important market trends. Firstly, it demonstrates the convergence of creative media with technology and consulting, as large technology players look to broaden their customer-focused advisory skills and take a larger share of the growing digital transformation consulting market. The deal also highlights the demand from the Indian outsourcers for US-based high-margin capabilities that enable them to build skills further up the consulting value chain.
The deal develops Infosys’ global connected network of Digital Studios to help clients respond to digital disruption of their industries. WONGDOODY builds on Infosys’ acquisition of UK-based product design and customer experience innovator Brilliant Basics, which was acquired last year for c.$9.7m.
2017 was a year of continued growth for Equiteq and further disruption of business models, which is transforming the industry that we have been tracking for 15 years. The disruption of the traditional consulting model from technology-enabled innovation, combined with economic trends, has led us to transition the definition of our industry coverage from consulting to the broader transforming knowledge economy. Our Global Knowledge Economy M&A report delivers you with actionable intelligence into the latest M&A and equity market trends across the knowledge economy, along with tips on how to consider these findings in the context of growing and selling your consulting or technology firm.