"An acquisition will succeed only if the acquiring company thinks through what it can contribute to the company it is buying, and not the other way around."
-Peter Drucker
October 03,2013
Accenture Buys Procurian for $375 Million
martinwolf Transaction Analysis
Financial Overview:
- Total Transaction Size: $375 million
- Implied EV/Revenue (Approx.) 2.6x
- Implied EV/EBIDTA (Approx.) 21.0x
- Transaction Structure: Cash
Transaction Facts
- Accenture (NYSE:ACN) announced today it will acquire Procurian, a leading provider of procurement outsourcing services, for $375 million in cash.
- Although additional financial details of the acquisition were not disclosed, SEC filings show that as of June 30, 2013, Procurian reported last 12 months (LTM) revenue of $139.95 million and and LTM EBIDTA of about $17.9 million. This would value the acquisition at approximately 2.6 times LTM revenue and approximately 21x times LTM EBIDTA.
- Headquartered in King of Prussia, PA, Procurian focuses on delivering services to the Global 2000 from locations in the United States, India, the United Kingdom, the Czech Republic, China and Brazil. Procurian is a subsidiary of the private equity firm, ICG Group, Inc. (Nasdaq: ICGE).
- The acquisition is expected to close by the end of the calendar year. All of Procurian’s 780 employees around the world are expected to join Accenture.
Solidifying leadership in a core space
- The acquisition of Procurian solidifies Accenture’s leadership position in the procurement outsourcing space – a position that was strengthened in late 2010 when the firm acquired Ariba’s sourcing services and business process outsourcing (BPO) services assets for $51 million.
- Accenture was one of several companies vying to purchase Procurian, which might explain that while the EV/revenue is in line with similar transactions, the EV/EBITDA is higher than the norm.
- Accenture has been on acquisition spree in 2013, buying companies that fill in gaps in its offerings or consolidate its position in a market. When the Procurian acquisition is completed, it will mark the firm’s 13th acquisition this year.
For more information, see the press release.
martinwolf was not the advisor in this transaction.
