Jacobs surprised us with its intention to acquire a 65% stake in PA Consulting for USD 1.8bn (enterprise value of the stake). For those of us that have been in the industry, we know that consulting acquisitions can be risky. Think of EDS and AT Kearney, Capgemini and Ernst & Young Consulting, or IBM and PwC Consulting.
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Globallogics made an acquisition in IT services with ECS. ECS brings precious digital capabilities including cloud and agile/DevOps.
Alten is to make its largest acquisition, with Milan-headquartered SDG Group. SDG has revenues of EUR 76m and a headcount of 950. Its operating margin is ~10%. We estimate the price paid by Alten to ~EUR 60m.
At first glance, SII performed very well during calendar Q3 2020 (corresponding to its Q2 FY21). Revenues were down by only 4.5% yoy at cc/cs. By comparison, Alten’s revenues were down by 19%! SII continued to overperform its French and European peers by a very significant margin.
We rarely talked about Denmark-based NNIT. The company is the former IT captive of Danish pharmaceutical firm Novo Nordisk, thus the name NNIT, which stands for Novo Nordisk IT.
The more we get to know Sweco, the more we think it is similar to Alten. Sweco impressed in Q3 2020 by limiting its revenue decline by 2% yoy at cc/cs, to SEK 4,547m (~USD 526m).
Tuck-in M&As continued despite the pandemic and the pending US elections today, with Belcan, AFRY, and Semcon active in the past week.
Europe has now entered its second lockdown. The lockdowns have different restrictions levels and different lengths. The UK and France are running for the full month of November. Officials in the two countries have, however, warned the lockdown might last longer, until Christmas at least.
AFRY, once again, protected its bottom line during the pandemic. The company limited its Q3 2020 EBITA margin decline to 40 bps to 6.7%. AFRY reduced its expenses by SEK 480m in Q3, a level similar to QA (SEK 490m).
Assystem announced its results two days before France back into a full lockdown. Despite a good financial performance in Q3 2020, the company changed, again, its guidance for full-year 2020.
We think Sweco has all options open for significant M&A activity. It has been five years since Sweco acquired Grontmij, bringing 6,000 employees and revenues of EUR 659m.
Sweco’s latest acquisition raises many questions. The company acquired a Norwegian architect firm, TAG Arkitekter (TAG).
Cyient Suffering from its Vertical Mix From the numbers, it may not show. But Cyient is
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 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’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 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.
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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 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 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).
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).
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