VMS and Services Procurement Acquisition Watch: Fieldglass, IQNavigator, Beeline? Jason Busch - June 21, 2013 8:21 AM | Categories: M&A | Tags: Beeline, Fieldglass, IQNavigator, L1, VMS Yesterday, we featured an in-depth analysis of why we believe with 90% certainty that at least one of the largest vendor management system (VMS) providers such as Fieldglass, IQNavigator or Beeline will be acquired in the next 12 months. Thinking about investors and potential suitors, there are a range of converging reasons why the timing is right for a transaction. Among others areas, we note that “fund timing” could be right given that the two largest VMS providers are currently owned by private equity firms: Private equity firms typically hold companies for less than five years, and the two largest VMS providers (by our estimates) are both own by PE firms. Prequin, a private equity research provider, notes that “The time period between the initial investment in a company and the date of exit, otherwise known as the holding period, varies greatly between portfolio companies. The average holding period for investments exited since 2006 is around 4.1 years; however this has fluctuated significantly between 2006 and 2011.” GTCR Golder Rauner acquired IQNavigator in June of 2008. And Madison Dearborn purchased Fieldglass in September of 2010. In the analysis, we also explore and explain why IBM, Ariba/SAP, SciQuest and a range of business process outsourcing (BPO) and managed services provider (MSP) candidates are also potential suitors that could absorb a top VMS within their procurement (and even governance, risk and compliance – GRC) solution portfolios. Yet perhaps the most important reason for an acquisition is not numbers-driven or a question of PE-fund timing. Rather, it’s the fact that services procurement is becoming such a critical value driver within the overall sourcing and operations equation for most companies. Not having a top offering in this area has long held back Ariba from even larger gains inside customers – and it is increasingly holding back other providers from addressing the potential to bring billions in additional spend under management for their customers and prospects. Coming up on Spend Matters, we’ll continue to explore what is next for services oriented providers in this sector – and the procurement organizations that are increasingly become reliant on their capabilities. See recent other Spend Matters PRO coverage here: Services Procurement: Holding Managed Services Providers (MSPs) Accountable to a BPO-Based Standard (Part 1) Services Procurement: Holding Managed Services Providers (MSPs) Accountable to a BPO-Based Standard (Part 2) Services Procurement: Holding Managed Services Providers (MSPs) Accountable to a BPO-Based Standard (Part 3) Services Procurement: Holding Managed Services Providers (MSPs) Accountable to a BPO-Based Standard (Part 4) Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of follow-up comments by email. Notify me of new posts by email.