This morning, IQNavigator announced it had acquired ProcureStaff Technologies, a division of Volt Information Sciences. Terms of the deal were not disclosed. ProcureStaff Technologies has been better known in recent years under the brands of Consol (and to a lesser degree, HRP), a VMS provider that was run independently but owned by Volt, a larger staffing and MSP provider.
In recent years, Volt wanted to further separate out the VMS tool from the parent company’s other staffing arms and legs, and thus emphasized the branding of Consol, powered by ProcureStaff Technologies, rather than ProcureStaff (which was seen as more the technology arm of Volt). But today, by selling off Consol and ProcureStaff Technologies entirely to IQNavigator, Volt is completely distancing itself from owning a VMS to serve MSP and staffing customers in an entirely technology-neutral manner.
According to company sources, Consol had over 40 VMS customers in North America and over a dozen additional customers in Europe. It was a top ten VMS by contingent labor and SOW spending volume (actually, depending on how and where one slices the services procurement numbers, Consol could place materially higher in the volume rankings, especially in North America), an important metric given the supplier-paid, transactional revenue model popular with the vast majority of VMS implementations.
Spend Matters has expected consolidation and M&A activity in the VMS market. See our research coverage here:
The acquisition is important for IQNavigator on many levels. IQNavigator is one of the top two VMS providers by volume (Fieldglass is the largest) and the acquisition will help close the gap – though not entirely – with its arch rival. It will also create some distance between IQNavigator and other rivals including Beeline (and to a lesser degree Provade, ZeroChaos, and others) in terms of relative contingent and SOW volume. But perhaps most importantly, it will help provide further penetration of the IQNavigator platform, to which the provider intends to offer flexible transition strategies within the ProcureStaff Technologies customer base.
ProcureStaff customers can, according to IQNavigator, expect a “business as usual” environment, specifically in the area of technology and platform migration:
“If a customer’s business needs dictate, their technology account team can also serve as a resource for customers and partners interested in a … migration to IQNavigator’s technology and infrastructure. An expeditious and no-cost standard migration will be able to address ProcureStaff customers’ and partners’ requests for expanded VMS functionality and services such as SOW, global invoicing, Rate IQ, mobile applications, reporting, monthly invoicing, services procurement and data analytics.”
The acquisition will also bring the Consol and ProcureStaff client and leadership teams over to IQNavigator. ProcureStaff invested significantly in a high touch client services model in recent years and in fact won an SIA award in 2013 based on a survey of its customers in the account management and general client services area. This client focus will no doubt complement IQNavigator’s VMS and SOW focus – as well as its MSP capability, which it has not entirely shed.
Spend Matters views the acquisition as a positive for both IQNavigator and ProcureStaff customers (for reasons we’ll examine in forthcoming coverage). Yet, given the extensive product overlap and clear (if not flexible) migration strategy to IQNavigator’s solution set and architecture for ProcureStaff customers, the more interesting questions involve how IQNavigator will continue to expand its overall product and commercial efforts – organically and otherwise – to close the gap with Fieldglass on a volume basis, as well as whether this transaction will bring IQNavigator closer to an IPO filing in 2014 (we believe it will).
The acquisition also raises the broader sector question of additional M&A and other funding and transactional activity in 2014. Stay tuned as we cover this acquisition in more detail on Spend Matters Plus/PRO later this week and next. We think it will be a harbinger of additional significant news in the VMS and services procurement sector in the coming months and quarters.
See additional coverage:
VMS and Services Procurement M&A: Customer Tips and Tactics (free research download)