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Alten Now Positioned on Mid-Sized Acquisitions
Alten Using Mid-Sized Acquisitions to Counterbalance the Pandemic Impact Alten had told investors it would increase
Assystem To Accelerate its Transformation By Selling Assets
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Is There A Space Left for ER&D Pure-Plays? Part 1: Consolidation of the Market
Is there a space left for ER&D pure-plays? We think the question is relevant. The ER&D market is an attractive market with solid growth prospects and has attracted outsiders. Growth prospects are solid (with the situation in commercial aviation somewhat better than planned).
Will Alten Be A Significant Clinical Trials CRO?
ER&D services largest pure-play, Alten, has ambitions as a clinical trials contract research organization (CRO). During Q2 2021, the company completed the acquisition of Cmed. Cmed, a clinical trial CRO based in the UK. It is a small firm with EUR 20m in revenues and 180 consultants. It has specialized in oncology, immuno-oncology, cell therapy, and rare disease.
Alten: A Big Rebound in Q2
Alten impressed investors with its Q2 rebound: revenues had a big rebound (+19.7% yoy at cc/cs) to EUR 714m. We had anticipated this solid rebound: the comps were very favorable (Q2 2020 was down 18.4% yoy organically).
Modis Comes Into the Light with Akka
Modis came into the light two weeks ago when Adecco announced the acquisition of Akka. Modis is a decently large IT services firm with 2020 revenues of EUR 2,179m. It is little-profitable with an adjusted EBITA margin of 5.7% (2019: 6.3%). Like everyone, the company faced headwinds in 2020, with revenues down 9% in 2020 (2019: -3%).
SII Close to a 30% Organic Growth this Quarter
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When Will Sweco Make A Significant Acquisition?
It has been five years since Sweco made its last significant acquisition. In 2015, the company took over Grontmij, which brought 6,000 employees and revenues of EUR 659m.
Sweco: Is Sustainability Good Enough?
Sweco had a relatively mild financial performance in Q2 2021 with a 2% yoy growth at cc/cs to SEK 5,643m (USD 649m). The company did not benefit from favorable comps (Q2 2020: +2% yoy at cc/cs). Sweco suffered from its lower utilization rate and headcount
AFRY: High Growth and Surprises in Q2
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Accenture Gets Big in Germany with Umlaut
Accenture made a big move with the acquisition of Umlaut, an ER&D vendor headquartered in Germany. The transaction comes as a surprise: umlaut brings EUR 350m in revenues. It is the first sizable acquisition that Accenture made for Industry X. Up to now
Cyient FY21: Make In India Saves The Day
Cyient – Thank You Make in India The Make in India program saved the day for
Assystem: Nuclear Engineering Drives Growth in Q1
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Alten: Toward A Growth Acceleration in Q2!
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AFRY Gets its Energy Division Back to Organic Growth
AFRY: the Energy Division Has Completed its Portfolio Transformation and Is Back to Growth AFRY finally
Thermo Fisher Makes A Massive Acquisition with PPD
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Atos Makes Surprise Acquisition in PLM Services
An Unexpected PLM Services Acquisition by Atos This is a move we did not expect: French
M&As: Many Tuck-In Acquisitions and Cognizant ESG
ER&D vendors continue to be very active in M&As, with many tuck-in acquisitions. AFRY is now in full acquisition mode with six transactions in 2021 YTD. Competitor Sweco has also accelerated with four transactions. Accenture has made an unusual transaction by taking over a manufacturer of industrial automation and robots in Brazil for Accenture Industry X. Finally, Cognizant acquired a significant German automotive ER&D vendor, ESG.
Capgemini Phasing Out the Altran Brand and Launching Capgemini Engineering
Capgemini is phasing out the Altran brand and launching Capgemini Engineering. Capgemini Engineering will group the activities of Altran and Capgemini Digital Engineering Services (DEMS).
Capgemini Betting on Altran To Reach its New 2025 Financial Objectives
Capgemini unveiled its new financial objectives for the 2020-2025 period, of which Altran will play a significant part. The company now targets a 7 to 9% annual revenue growth at cc and an adjusted EBIT margin of 14% by 2025. Capgemini will reach revenues in the range of EUR 22.2-24.4bn by 2025 (from an estimated pro-forma EUR 16.3bn in 2020) and EUR 3.1-3.4bn in adjusted EBIT (from EUR 1.5bn in 2020).
Hitachi Buys GlobalLogic for USD 9.6bn. A Shock to the ER&D industry
The Hitachi USD 9.6bn acquisition of GlobalLogic was a shock to the engineering and R&D service industry. Hitachi values GlobalLogic 37.4x its calendar 2021 adjusted EBITDA. The multiple is very high, even for a firm of the quality of GlobalLogic. Only three years ago, Apax sold its 48% stake in GlobalLogic to Switzerland-based Partners Group. At the time, the transaction valued GlobalLogic USD 2bn. Back then, the USD 2bn valuation seemed in line with the Aricent and Luxoft respective acquisitions by Altran and DXC.
Nuclear Engineering Remains Promising for Assystem
Nuclear engineering remains promising for Assystem. Revenues of nuclear engineering proved slightly more resilient during 2020 (with a 4.2% revenue decline at cc/cs) than the company itself (-5.3%). In H1 2020, the activity was impacted by the lockdown in Europe, as nuclear engineering requires a higher level of onsite work than ER&D services. Revenues bounced back in H2, reaching a slight organic growth.
An Integrated AFRY: Repositioned around Digital and Sustainability
AFRY recently unveiled its strategy: the company plans to become more integrated and positioned around digital technologies and sustainability. AFRY has suffered in the past few years of a lack of organic growth. In 2019, right before the pandemic, the company grew organically by 1.9%, underperforming most competitors. Then came 2020, and AFRY handled the crisis well, with an organic decline of only 6.4%
Akka Shifts its US Strategy and Goes India-Centric
Akka Technologies made a significant shift in its US strategy with the appointment of Dharam Sheoran. Mr. Sheroan joined from Wipro and must have been an ideal candidate for Akka. At Wipro, he headed several global service lines, including automotive and A&D. His experience, therefore, matches Akka’s presence and ambitions in the country.