Sweco’s latest acquisition raises many questions. The company acquired a Norwegian architect firm, TAG Arkitekter (TAG).
Cyient Gradually Back to Expansion
Cyient Suffering from its Vertical Mix From the numbers, it may not show. But Cyient is
Wipro Acquires A Semiconductor Engineering Specialist
Wipro joined many competitors in acquiring a semiconductor engineering specialist. ER&D service vendors are rushing into this market, attracted by its long-term growth potential. Indeed, we estimate to ten the number of semi-conductor M&As since 2015. Altran, through the Aricent, GlobalEdge, and SciConTech transactions, has been the most acquisitive. However, all the industry’s brand names have been active, e.g., Tech Mahindra, HCL Tech, Alten, LTTS, and Cyient.
Accenture Strengthens Industry X in Supply Chain
Accenture made another acquisition for Industry X. The new firm acquired by Accenture is named Myrtle Consulting and is headquartered in Houston, TX. We estimate its headcount to below 200. It is a consultancy firm.
Akka Raises EUR 200m. Share Up 40%
Akka’s share was up by almost 40% on Tuesday (October 6). The company reassured investors by raising EUR 200 at favorable terms for existing shareholders
Alten Accelerates its M&A Activity
Alten will accelerate its M&A activity in 2020. This is one of the tactical changes that the company announced during its H1 2020 results presentation. The company is also shifting its commercial effort to financial services, energy, and life science, and slightly accelerating its offshore deployment.
Assystem Reassures About Expleo’s Financials
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Assystem Upbeat about Nuclear Engineering
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Accenture X Acquires A SCM SAP Specialist
Accenture made another acquisition for its Industry X unit. Salt Solutions is based in Würzburg, 80 miles away from Frankfurt, in Germany. It, also, has offices in Stuttgart, Dresden, and Munich. Salt is SAP-centric with a specialization in SCM and also capabilities around production systems, all around SAP.
Infosys Gains Product Design & Engineering Capabilities with Kaleidoscope
Infosys made a rare acquisition in the world of ER&D with Kaleidoscope Innovation. Kaleidoscope is headquartered in Cincinnati, OH, has a headcount of 60 and revenues of USD 21m in calendar 2019. Infosys is paying USD 42m.
Ricardo Suffers from its Exposure to Automotive in FY20
Ricardo paid the price for its exposure to the automotive sector, which represents 55% of total revenues. After a stable H1 FY20 (the ending June 30, 2020), H2 collapsed with revenues down 23% at cc/cs (our estimate). Surprisingly, Ricardo performed worse than an automotive pure-play such as EDAG (-14.8% during the same period) and Akka (-20.3% at cc/cs).
Charles River Acquires Cellero for its HemaCare Business
In August, CRL acquired a small firm, Cellero, headquartered close to Boston for USD 38m. Cellero brought a geography presence to HEMA (which is based in California).
SII Does Better Than Expected in Q1 FY21
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Bertrand Does Better than Competitors in Q3
Bertrandt reported its Q3 FY20 results (calendar Q2 2020). Revenues were EUR 205m, down by a massive-20.9% yoy, and the EBIT margin was -0.9% (Q3 FY19: +2.7%). Yet, Bertrandt’s results were better than those of EDAG ( yoy revenues down by 32.6%) and Akka (-31.4% yoy at CC/CS).
Altran Benefits from its Diversified Client Mix in Q2 2020
We got a glimpse of the performance of Altran when Capgemini announced its H1 2020 results
Cyient Acquires An Onshore Mining Consulting Unit in Australia
Cyient is to acquire Melbourne-based Integrated Global Partners (IG Partners) for AUD 12m in cash (USD 9m) + earn-outs. IG Partners is a mining business and organizational consulting firm. The company has a specialty in enterprise asset management. It had in FY20 revenues of AUD 15m (USD 11m) and a headcount of 40.
EDAG Declined by 33% in Q2 2020
We were expecting EDAG would have a difficult Q2, as the company is very European and services mostly the automotive sector. However, we had not anticipated a decline of this scale: revenues were down by 32.6% in Q2. Unsurprisingly, the EBIT margin was significantly in negative territory (-14.4%).
Assystem Bounced Back in June
As expected, Assystem suffered in Q2 2020: revenues declined by 13.7% yoy CC/CS during the quarter. Staffing was down by 16.3%, while Energy & Infrastructure did somewhat better (-13.3%). The core nuclear engineering business was down by 10.1% (our estimate).
Alten Does Better than Expected in Q2. H2 Outlook Is Uncertain
Alten announced better than expected revenues in Q2 with a CC/CS decline of 18.4% (we expected -23%), after a growth of 4.0% in Q1. During H1, the decline was 7.3% (guidance: -9%).
UPDATED: Akka Suffers Greatly from its Lack of Client Diversification in H1 2020
Revenues Collapsed in H1 2020 Akka suffered greatly in H1 2020, with revenues down by 20.3%
Unofficial: Renault Selects its Four ER&D Preferred Vendors
According to unofficial sources, Renault has now finalized its list of preferred ER&D service vendors, reducing it from nine vendors to four. The four winners are Akka, Bertrandt, Expleo, and Segula. They will now grab 80% of Renault’s ER&D spending and double their market shares.
HCL’s ERS Manages Well the Downturn Thanks to its Balanced Client Base
HCL Tech reported good set numbers for its Engineering and R&D Services (ERS) business in Q1 FY21. Revenues were down by 5.1% at CC to USD 378m. The growth is mostly organic (CS) and only includes an estimated USD 5m in acquired revenues, resulting from the Sankalp acquisition. This positions ERS among the best-performing units this quarter.
Sweco Demonstrates Its Resilience Despite COVID-19
Sweco had already demonstrated its resilience in Q1, with a +4% organic growth. In Q2, despite COVID-19, the company remained in positive territory (+2%). The performance is a surprise, as Sweco is very sensitive to the number of working days.
Earnings Preview: Revenues of Alten to Plunge in Q2
ER&D’s largest pure-play globally, Alten, will be announcing its Q2 2020 revenue by the end of July. The company had a very decent Q1, with a 4% CC/CS revenue growth. However, it warned that revenues would be down by ~22% in Q2.
AFRY Hit by Collapse in Automotive Engineering Demand in Q2
No surprise. AFRY had a terrible Q2 2020: revenues were down by 9.2% yoy at CC/CS. The Industry and Digital Solutions Division led the decline (with revenues down yoy at 16.3% at CC/CS). The Division suffered in the automotive sector, whose revenues collapsed by 40% during the quarter.