June 2018: Knowledge Economy M&A and Equity Market Update

By Ramone Param, Director, Equiteq

  • 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.

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Healthcare and Life Sciences Consulting Global M&A Report 2018

Our inaugural review of deal flow in the healthcare and life sciences consulting space shows rising demand from cash-rich strategic and financial buyers for larger acquisition opportunities

By Ramone Param, Director

Published today, Equiteq’s inaugural 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 rose 28%, 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.

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GDPR: The opportunity for professional services consulting firms

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.

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May 2018: Knowledge Economy M&A and Equity Market Update

By Ramone Param, Director, Equiteq

  • 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.

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April 2018: Knowledge Economy M&A and Equity Market Update

By Ramone Param, Director, Equiteq

  • Major deals profiled include Infosys’ acquisition of WONGDOODY, HPE’s acquisition of RedPixie and Wavestone’s acquisition of Xceed.
  • The Equiteq Knowledge Economy Share Price Index achieved 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.

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Knowledge economy M&A activity was solid in 2017, with digital disruption driving demand and premium valuations

By Ramone Param, Director, Equiteq

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.

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Equiteq Advised Knowledge Economy M&A Deals: Q1 2018

  • Insight Strategy Advisors joins Precision Value & Health
  • Ducker Worldwide joins Frontier Strategy Group
  • Axentel joins Park Place Technologies
  • 8works joins Oliver Wyman

We have had a strong start to 2018 across regions, advising a variety of knowledge economy clients on their equity growth and closing a number of high-profile transactions. Here we highlight our advisory work with clients which resulted in M&A deal closures during the first quarter.

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March 2018: Knowledge Economy M&A and Equity Market Update

By Ramone Param, Director, Equiteq

  • Major deals included Apax’ acquisition of Business Integration Partners (Bip), Duff & Phelps’ acquisition of Kroll, Accenture’s acquisition of MXM (Meredith Xcelerated Marketing) and the completion of Altran’s acquisition of Aricent.
  • Equiteq advised Bip on its sale to Apax, c3 consulting on its sale to Ankura and 8works on its sale to Oliver Wyman.
  • The Equiteq Knowledge Economy Share Price Index dipped slightly over the period.

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February 2018: Consulting M&A and Equity Market Update

By Ramone Param, Director, Equiteq

  • 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 Index fluctuated 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.

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January 2018: Consulting M&A and Equity Market Update

By Ramone Param, Associate Director, Equiteq

  • 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.
  • Equiteq advised New York-based leading market access consultancy Insight Strategy Advisors (ISA) on its sale to Precision Value & Health.
  • 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.

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