Globally, the M&A market is showing remarkable durability, driven by a confluence of factors, including the rise of artificial intelligence (AI) and a more demanding tech-enabled consumer class. Company leadership across sectors is finding M&A to be a more critical strategic lever than ever. Organic growth strategies, which have historically underperformed compared to M&A, are now even less viable as companies seek to accelerate growth in a low-growth economy.⁽¹⁾

Over the past two and a half years, lower levels of M&A activity have led to pent-up demand, especially within the private equity (PE) sphere. According to PwC, PE firms held more than 27,000 portfolio companies globally at the beginning of the year, about half of which had been on the books for at least four years—typically the length of time at which they are primed for exits. Fast-forward to mid-2024, and most of those investments have aged another six months. Many PE firms are in the process of raising new funds, increasing the pressure to sell.⁽²⁾

As the second half of 2024 takes shape, it is important to note key M&A considerations. For buyers, it is critical to align M&A strategy with corporate objectives, particularly regarding transformation and business model reinvention. Evaluating AI’s impact on business models, conducting data analysis, performing due diligence, and planning to retain key talent are all essential. Focusing on sustainability and developing a compelling equity story with a robust value creation plan is also crucial. For sellers, optimizing outcomes through regular strategic reviews and thorough presale preparation is vital for success.

This summer, Houlihan Lokey was involved in several major transactions in the IT services sector. Notably, Houlihan Lokey served as the sellside advisor to Alchemy Technology Group for its strategic investment from Avance Investment Management and Nuspire for its sale to PDI Technologies.

Houlihan Lokey has advised on some of the most significant transactions in the IT services sector and has cultivated deep relationships with the private equity and strategic communities. Our deep understanding of the dynamics within the sector allows us to deliver strategic outcomes that are closely aligned with our clients’ business goals and desired outcomes.

(1) McKinsey & Co. (Top M&A trends in 2024: Blueprint for success in the next wave of deals).
(2) PwC (Global M&A Industry Trends).

The transactions below are in the MSPs, VARs, and cybersecurity spaces:

Apax Acquired Thoughtworks | August 2024
Thoughtworks has agreed to an acquisition by an affiliate of funds advised by Apax Partners (Apax) in a deal valued at $1.75 billion. According to Thoughtworks, Apax will purchase all of the outstanding shares of Thoughtworks common stock that it does not already own for $4.40 per share, which implies a total enterprise value of approximately $1.75 billion for the company. The purchase price represents a 30% premium to Thoughtworks’ closing stock price on August 2, 2024, the last full trading day prior to the transaction announcement, and a premium of approximately 48% over the volume-weighted average price of Thoughtworks’ stock for the 30 days ending August 2, 2024. Apax is deeply committed to Thoughtworks’ unique culture, its unwavering focus on technological excellence, and its mission of transforming the world through technology. Apax believes that it is in the interest of all stakeholders for the company to return to private ownership to allow the organization to refocus on growth.

Intellias Acquired NorthLink Digital | August 2024
Intellias has announced the acquisition of NorthLink Digital, a U.K.-based IT consultancy specializing in financial services and insurance (FS&I). The latest in a series of strategic acquisitions, this deal will enable the global software engineering company to expand its offering in FS&I in EMEA and beyond.

MKD Acquired Cetus Capital | July 2024
MKD, an automotive electronics manufacturer, announced the completion of its acquisition of Cetus Capital on July 31. Prior to the business combination, Cetus Capital was a blank check company formed to effect a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. The acquisition will enhance collaboration by providing a common framework and language for representing knowledge, which is essential for interdisciplinary teams in digital engineering projects.

Sparq Acquired Kingsmen Software | July 2024
Sparq, a leading U.S.-based provider of outsourced digital engineering for technology-driven and Fortune 1000 companies, has acquired Kingsmen Software, a U.S.-based engineering firm offering generative AI strategy, consulting, and full-stack development. Founded in 2013, Kingsmen Software has established itself as a prominent player in enterprise banking, payments, and capital markets, with recent expansion into mid-market and late-stage FinTech.

Scalian Acquired Mannarino Systems & Software | June 2024
Scalian has acquired Mannarino Systems & Software Inc. (MANNARINO), a Canadian company specializing in software engineering for electric aircraft and drones and certified systems for the aerospace sector. This acquisition aligns with Scalian’s strategy to expand internationally and focus on safety-critical systems and software engineering. MANNARINO’s engineering team is dedicated to developing safety-critical systems, with deep expertise in hardware and software designs for a wide range of aeronautic products, including next-generation electric aircraft and drones.

Cognizant to Acquire Belcan | June 2024
Cognizant has signed a definitive agreement to acquire Belcan, a portfolio company of AE Industrial Partners and a leading global supplier of Engineering Research & Development (ER&D) services, at a purchase price of approximately $1.3 billion in cash and stock. Belcan is an established player in ER&D that provides mission-critical digital engineering services for a long-standing customer base across the commercial aerospace, defense, space, marine, and industrial verticals, primarily in North America and the U.K.

Accenture Acquired Teamexpat | May 2024
Accenture has acquired Teamexpat, an embedded software specialist for complex high-tech products and systems headquartered in Eindhoven, Netherlands. Teamexpat focuses on software development, testing, and integration for lithography systems in the semiconductor industry. This acquisition will strengthen Accenture’s smart, connected products capabilities for clients in the semiconductor sector and other discrete manufacturing industries.


Contacts:

Houlihan Lokey Advises Alchemy Technology Group | July 2024
Alchemy Technology Group, a premier value-added reseller and service provider of high-growth software-as-a-service solutions, has received a strategic investment from Avance Investment Management. Founded in 2016, Alchemy was purpose-built to go beyond the offerings of a traditional value-added reseller, providing a truly client- and vendor-centric approach. Alchemy serves a loyal and diversified client base across high-compliance end markets, delivering high-impact, critical software solutions, including cybersecurity, identity and access management, hybrid cloud, desktop-as-a-service, and data offerings. With Alchemy’s disruptive, next-generation technologies, deeply embedded vendor and client relationships, differentiated service offerings, and dedicated sales team, the company is well-positioned for future growth. Houlihan Lokey served as the exclusive financial advisor to Alchemy Technology Group.

Houlihan Lokey Advises Cybolt | June 2024
Cyber Guards, a Tennessee-based managed security services provider, has been acquired by Cybolt, one of Mexico’s leading cybersecurity services providers that is expanding rapidly into the U.S. Cyber Guards provides SOC as a service, detection and response, attack path management, and risk and compliance solutions for small and medium-sized companies. The transaction marks Cybolt’s second acquisition in the U.S. Houlihan Lokey served as the exclusive buyside advisor to Cybolt.

Houlihan Lokey Advises Nuspire | June 2024
Nuspire has been acquired by PDI Technologies (PDI). This combination will expand the technology and expertise of PDI’s cybersecurity and managed network services business segment while accelerating the delivery of innovative managed security services to convenience retail, QSR, automotive dealership, and adjacent industries. Nuspire delivers innovative managed security services, managed detection and response, endpoint detection and response, and consulting solutions tailored to clients’ needs. Nuspire’s technology-agnostic platform and data-driven intelligence seamlessly blend human expertise, advanced AI/automation, and advanced technologies to provide unprecedented visibility, control, and predictive intelligence across clients’ cybersecurity infrastructure. Houlihan Lokey served as the financial advisor to Nuspire.

FFL Completed a Strategic Investment in Medicus IT | July 2024
FFL Partners, a private equity firm focused on growth investments in healthcare and tech-enabled services businesses, announced that it has completed an investment in Medicus IT, a leading healthcare-focused IT managed services provider. This partnership will accelerate Medicus IT’s expansion and enhance its mCare services platform, leveraging FFL’s expertise to drive growth and innovation. Most importantly, FFL’s investment will enable Medicus IT to serve more healthcare providers, allowing them to focus more on their patients. Financial terms of the transaction were not disclosed.

Abacus Group Acquired Tribeca | June 2024
Tribeca, a U.K.-based managed IT services provider, has been acquired by Abacus Group (Abacus), a financial services-focused managed services provider (MSP) backed by FFL Partners. Tribeca has additional offices in New York and Hong Kong and has deep expertise in the U.K. private equity, asset, and wealth management markets. The transaction strengthens Abacus’ position as one of the largest MSPs in the U.K. focused on the financial services sector.

Omega Systems Acquired Amnet Technology Solutions and Cloudpath | June 2024
Amnet Technology Solutions (Amnet), a managed services provider, and Cloudpath, a cloud connectivity platform, have been acquired by Omega Systems, a leading managed services and managed security services provider backed by Pfingsten Partners. Amnet provides managed services to clients in financial and professional services, life sciences, and transportation. Cloudpath provides customers access to public cloud providers, including AWS, Google Cloud, Azure, and more. With these acquisitions, Omega Systems has emerged as a top-performing MSP and MSSP across the U.S. and internationally.

Charlesbank Invests in Quorum Cyber | June 2024
Quorum Cyber, a leader in managed detection and response and security advisory, has received an investment from Charlesbank. The transaction bolsters the financial support of Quorum Cyber’s current investor, Livingbridge, and provides the company with capital to maintain its impressive growth momentum in the U.K. and North America.


Contacts:

Houlihan Lokey Advises TSPi | May 2024
Technology Solutions Provider, Inc. (TSPi) has been acquired by Abt Global (Abt). Headquartered in Reston, Virginia, TSPi is a leading provider of IT modernization solutions, specializing in agile low-code/no-code application development and cloud technologies across major platforms, including Pega, Salesforce, Appian, Amazon Web Services, and Google Cloud. The company is notably one of only a few Pega Government Elite partners and has been recognized by Google for its partnership within the federal space. Houlihan Lokey served as the exclusive financial advisor to TSPi and marketed, structured, and negotiated the transaction on behalf of the company.

Oxford Global Resources Acquired Linksap | June 2024
Oxford Global Resources, a professional services firm providing staffing and consulting services in the U.S. and Europe, announced its acquisition of Linksap Europe Ltd., a leading provider of SAP specialty staffing services across Europe. Linksap is recognized for its highly skilled consultants and extensive network within the SAP software ecosystem. This acquisition will drive accelerated business value to Oxford’s clients by strategically expanding its high-end SAP offerings into targeted European markets and customer channels.

Centroid Acquired Qbit | June 2024
Centroid Systems, a leading cloud service and technology company in North America specializing in comprehensive transformation services across the enterprise, announced its strategic acquisition of Qbit, a renowned Oracle partner. Qbit is recognized for its innovative and impactful Oracle solutions, and this acquisition will drive accelerated business value to Centroid’s clients by expanding its application and infrastructure managed services capabilities on a global scale.

Buchanan Technologies Acquired Technology Spa | June 2024
Buchanan Technologies, a leading managed IT and cloud services provider, has acquired Technology Spa, a prominent cloud orchestration and enterprise productivity solutions provider. Technology Spa, founded in 2015 in Dallas, Texas, specializes in cloud platforms like Microsoft 365, AWS, and ServiceNow. Recognized for its expertise in both small and enterprise-grade cloud technologies, Technology Spa has successfully helped businesses navigate digital transformation. Buchanan Technologies’ acquisition will enhance its cloud capabilities by incorporating Technology Spa’s proven cloud orchestration and assessment tools, thus continuing to deliver a robust and scalable suite of services to its customers.


Contacts:

Census Acquired Fulcrum | July 2024
Census has acquired Fulcrum, an AI-first growth platform for business teams. This strategic acquisition represents its commitment to the company’s mission to build a trusted data layer for data and business teams to collaborate. AI-driven insights, operations, and agents are the future of how enterprises operate efficiently and impact business growth. Fulcrum and Census will create a foundation for an AI-driven data collaboration between data and business teams.

Zensar Acquired BridgeView | July 2024
Zensar Technologies (Zensar), an RPG Group company headquartered in Pune, India, and a leading experience, engineering, and engagement technology solutions company, announced the full acquisition of BridgeView Life Sciences. The U.S.-based leader in information technology and operations provides a comprehensive range of advisory, transformation, and managed services exclusively for life sciences customers endeavoring to launch products or new indications, assess and optimize their operations, or engage in merger or acquisition transactions. This strategic move strengthens Zensar’s Healthcare and Life Sciences vertical and expands its pharma commercial and product launch expertise.

Synechron to Acquire Chamonix | June 2024
Synechron, a global leader in digital transformation consulting for the financial and technology sectors, has executed a definitive agreement for the acquisition of Chamonix IT Management Consulting Pty Ltd. and Exposé Data Pty Ltd. Both companies, headquartered in Adelaide, Australia, and with additional operations in Melbourne and Brisbane, are recognized for their expertise in digital transformation, artificial intelligence, and analytics. This acquisition will drive accelerated business value to Synechron’s clients by adding a comprehensive suite of digital transformation, AI, and analytics solutions across key industries, including government, healthcare, utilities, energy, and education.

VTG Acquired Clear Cloud | June 2024
VTG, an industry-leading national security solutions provider, announced that it has acquired Clear Cloud, LLC, strengthening its digital transformation capabilities and accelerating its Intelligence Community-focused growth strategy. Based in Northern Virginia, Clear Cloud delivers software, cloud, and data engineering solutions and services to U.S. Intelligence Community customers and mission. The acquisition of Clear Cloud underscores and accelerates VTG’s software-oriented Intelligence Community growth strategy. This is VTG’s second acquisition this year after acquiring the digital transformation innovator Vana Solutions. A&M Capital Partners made a majority investment in VTG in September 2023.

MOURI Tech Acquired Vertisystems | June 2024
MOURI Tech, a global provider of enterprise IT solutions, announced the acquisition of Vertisystem, an IT services company specializing in the gaming and hospitality industries in the U.S. This acquisition is part of MOURI Tech’s strategy to enhance its service offerings and broaden its footprint in the gaming and hospitality industry verticals. Additionally, this acquisition will enable MOURI Tech to expand its presence in the U.S. and India, enhancing its global delivery expertise and expanding its capabilities within the Snowflake and Google Cloud ecosystems.


Contacts:

Houlihan Lokey Advises Cybolt | June 2024
Cybolt Inc. (Cybolt) has integrated Pontis Research Inc. (PRI). Headquartered in Miami, Florida, and founded in 2019, Cybolt is a pure-play cybersecurity services firm providing a full suite of cybersecurity and technology offerings to clients across North America. With a solid offering portfolio through a successful integration of Latin American cybersecurity leaders since 2019, Cybolt now serves more than 200 clients across key sectors, including finance, retail, manufacturing, and public. Cybolt is positioned as one of Mexico’s top cybersecurity services providers with a vision for expansion to the U.S. market, leveraging its operational success and prior M&A experience. PRI provides services in the identity access management (IAM) and risk management segments of the cybersecurity industry, with Fortune 500 clients across the U.S. Houlihan Lokey served as the exclusive buyside financial advisor to Cybolt.

Vela Software Acquired MXM Sistemas | June 2024
Vela Software (Vela) announced the acquisition of MXM Sistemas (MXM), a software development company specializing in business solutions, cloud computing, business intelligence, compliance, and governance. This acquisition will grant Vela access to global technological innovations that will enhance MXM’s products and services. Through this acquisition, Vela aims to strengthen and expand its presence in Brazil and Latin America.

Selbetti Acquired InterCompany | June 2024
Selbetti Tecnologia announced the acquisition of InterCompany, a São Paulo-based company specializing in IT infrastructure, cloud, IoT, protection, and automation services. This acquisition marks a significant milestone in Selbetti Tecnologia’s advancement in artificial intelligence and information security.

Vensure Employer Solutions Acquired Apex America | June 2024
Vensure Employer Solutions (Vensure), a leading provider of technology, managed services, and global business process outsourcing, has acquired Apex America, an Argentina-based specialist in technology-based services for customer experience and provider of nearshore professionals. With this acquisition, Vensure expands its services to customers both within and outside the U.S. through its outsourcing business unit, Solvo.

Fresh Consulting Acquired Atomic32 | June 2024
Fresh Consulting, a Washington-based consulting firm, announced the acquisition of Atomic32, a Mexico City-based software team of 130 professionals. Atomic32 specializes in advanced software and data engineering, including developing FinTech software for 60% of Mexico’s regional banks. Together, Atomic32 and Fresh Consulting will collaborate to expand Fresh’s automation and robotics services, catering to manufacturing companies in need of modern approaches to scale efficient production.

Positivo Technologia Acquired Algar TI Consultoria | March 2024
Positivo Tecnologia, a Brazilian technology company, has signed an agreement to acquire Algar TI Consultoria S.A., a managed IT services provider formerly part of the Algar Group. The acquisition aims to solidify Positivo Tecnologia’s position in the IT services sector by integrating Algar TI Consultoria’s extensive expertise and client base into its operations. The acquisition does not include the customer experience (call center) unit of Algar Tech, focusing instead on the company’s managed IT services operations. The company expects this strategic decision to propel Positivo Tecnologia into a leading position in the technology services market, providing comprehensive solutions from hardware infrastructure to information technology management services across Brazil and Latin America.


Contacts:

The IT services sector operates within Houlihan Lokey’s Business Services Group, which has earned a reputation for providing superior service and achieving outstanding results in M&A advisory, capital-raising, restructuring, and financial and valuation advisory services.

Global IT Services Coverage/Sharp Subsector Focus: Global IT services coverage, with more than 30 senior finance professionals strategically positioned across eight countries to maximize exposure and optimize outcomes. Sharp subsector coverage of:

Combination of IT Services and Industry Vertical Expertise: Combining IT services expertise with Houlihan Lokey’s extensive end-market coverage of industries like healthcare and pharma, technology, financial services, consumer, and manufacturing creates a powerful value proposition for our IT services clients.

Strategic and Private Equity Buyer Experience: Houlihan Lokey has advised on more than 350 IT services transactions, evenly spread across strategic and financial buyers.* We have a long-standing track record of selling businesses to the industry’s most recognized investors and strategic buyers.

Execution and Process Excellence: Houlihan Lokey ensures successful client outcomes through thoroughly executed, competitive processes. Our approach is characterized by stringent attention to detail and creative positioning, coupled with a deep understanding of our clients’ business models and key financial and operational metrics. Furthermore, we maintain competitive tension throughout each process to enhance outcomes for our clients.

Platform Capabilities: Houlihan Lokey has the ability to provide capital markets, transaction services, fund formation, and other services, which creates a one-stop-shop appeal.

For more information on our services or to discuss how we can help advance your vision, please contact the Houlihan Lokey representatives mentioned above. We look forward to our continued work together.

*Selected transactions were executed by Houlihan Lokey professionals while at other firms acquired by Houlihan Lokey or by professionals from a Houlihan Lokey joint venture company.

About the Business Services Group

Houlihan Lokey’s Business Services Group has earned a reputation for providing superior service and achieving outstanding results in M&A advisory, capital-raising, restructuring, and financial and valuation advisory services. Our team covers a broad array of sectors, with financial professionals dedicated to each of our primary coverage areas. Our senior-level relationships throughout the industry open doors to opportunities for our clients—whether they are seeking financing, a strategic partner, or a prospective buyer. In 2023, Houlihan Lokey was ranked the No. 1 investment bank for all global business services M&A transactions by LSEG (formerly Refinitiv).*
*Excludes accounting firms and brokers.

About Houlihan Lokey

Houlihan Lokey, Inc. (NYSE:HLI) is a global investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, and financial and valuation advisory. Houlihan Lokey serves corporations, institutions, and governments worldwide with offices in the Americas, Europe, the Middle East, and the Asia-Pacific region. Independent advice and intellectual rigor are hallmarks of the firm’s commitment to client success across its advisory services. The firm is the No. 1 investment bank for all global M&A transactions, the No. 1 M&A advisor for the past nine consecutive years in the U.S., the No. 1 global restructuring advisor for the past ten consecutive years, and the No. 1 global M&A fairness opinion advisor over the past 25 years, all based on number of transactions and according to data provided by LSEG (formerly Refinitiv).