Notable deals included Capgemini’s acquisition of LiquidHub, Veritas Capital’s acquisition of PwC US’s government consulting business, Valtech’s acquisition of True Clarity and Livingbridge-backed Catalyst Development’s acquisition of Knadel.
Equiteq advised Ducker Worldwide on its sale to Frontier Strategy Group and Axentel Technologies on its sale to Park Place Technologies.
The Equiteq Consulting Share Price Indexfluctuated over the month and ended the period broadly flat.
Capgemini acquires digital customer experience firm LiquidHub
Target: LiquidHub is a US-headquartered global customer engagement company that help companies improve customer experience and drive growth.
Buyer: Capgemini is a France-headquartered global leader in consulting, technology services and digital transformation.
Deal Value: EUR400m (1.8x FY17 Revenue)
Deal Insight: In October of last year, The Times of India reported that Cognizant and Apax Partners were among shortlisted suitors for a potential acquisition of LiquidHub for as much as $600m. At the beginning of February, Capgemini announced that it would acquire the business for almost two times its revenue.
LiquidHub was founded in 2000 and raised $52.54m of Series B venture funding from ChrysCapital in 2014. The investment put the company’s pre-money valuation at $116.67m and enabled it to make investments in its growth including completing a number of acquisitions over 2016 and 2017. The company’s shareholder includes key management and investor ChrysCapital.
Major deals included Starr Investment Holdings’ acquisition of ACA Compliance, EY’s acquisition of Citizen, KPMG’s acquisition of Cyberinc, Oliver Wyman’s acquisition of Draw and the newly formed Kantar Consulting’s acquisition of Mash Strategy.
The Equiteq Consulting Share Price Index achieved strong gains of 6% over the month, with robust rises in all segmental indices apart from Media.
Starr Investment Holdings’ acquires ACA Compliance from New Mountain Capital
Target: ACA Compliance Group is a leading provider of risk management and technology solutions to the financial services industry in the U.S. and Europe.
Seller: New Mountain Capital is a U.S.-based private equity investor, with a focus on building and growth, pursuing long-term capital appreciation.
Buyer: Starr Investment Holdings is a New York-based investment adviser that invests in privately-held technology-enabled services businesses with a particular focus on industries such as financial services and healthcare services.
Deal Insight: ACA Compliance was acquired by a consortium of investment firms including New Mountain Capital through an LBO in December 2013 for an undisclosed sum. Since the investment, ACA has rapidly grown its team. It has benefited from the rise in demand for risk and corporate governance services from financial services clients disrupted by new regulatory and compliance requirements since the last financial crisis. Over the last few years, ACA invested in new technologies and expects to develop these further with its new backing from Starr. The new capital is also expected to enable ACA to expand into new service lines and industry verticals across the globe.
The final quarter of 2017 saw global deal activity in the consulting sector fall by 4% year-on-year and decline 1% as compared to the third quarter. As frequently observed, there were significant variations in deal activity by region and amongst market segments. There is strong buyer appetite for deals as we commence 2018. Continue reading →
Xafinity is acquiring the actuarial, pensions administration and investment consulting businesses of Punter Southall, in a deal valued at £153m. Xafinity provides pensions actuarial advice and administration services to 550 occupational pension funds in the UK. As part of the transaction, it will acquire Punter Southall Limited, Punter Southall Investment Consulting and Punter Southall Administration Limited for a combination of cash and shares. The deal is expected to create the largest pure-play pensions consultancy in the UK, with c.900 employees across the country, that generates over £100m of revenue. After the transaction, Punter Southall’s remaining operations will be focused on workplace savings, health and protection consulting and wealth management.
The deal is set to be the first major acquisition in the investment advisory industry since the Financial Conduct Authority referred the industry to the UK’s competition regulator. The referral is expected to result in new rules that distributes clients of the big three (Aon, Mercer and Willis Towers Watson), while driving consolidation amongst smaller advisers.
Despite a politically-charged global environment and the increasing number of regulatory hurdles, the high levels of M&A experienced in 2016 have been resilient in 2017 and we have also seen the continuation and evolution of a number of trends.
Looking at M&A broadly, we are seeing that regional differences are no longer as prevalent. In an increasingly global economy, acquirers from Europe and North America alike are taking an active role, canvassing the global market place for M&A opportunities that support their non-organic growth ambitions.
Our fourth annual global survey of buyers of consulting businesses delivers current, actionable intelligence in the five segments Equiteq specializes in: Management consulting, IT consulting, Media & Marketing, Engineering consulting and HR consulting. Findings, published today, reveal:
Buyers expect to initiate 50% more acquisitions year-on-year
Convergence continues to be a key trend as buyers look to diversify
55% of buyers think targets could be better at communicating their market proposition
94% of buyers say it is important to retain management teams post-acquisition
Over 70% of targets do not make their IP apparent to prospective buyers
Three quarters of buyers expect at least 40% of a target’s clients to be blue chip