2015 Spend Matters Prediction: The M&A Boom Continues

2014 saw procurement-sector M&A heat up considerably. SAP boldly made 2 strategic moves in the sector, buying services procurement and contingent labor specialist Fieldglass and T&E titan Concur. Sourcing specialist Iasta merged with contract management expert Selectica. The UK-centered P2P provider Proactics crossed the Atlantic to gobble up full-service sourcing expert Intesource at a bargain price. Tungsten acquired DocuSphere. Periscope bought BidSync. Opus Global acquired Hiperos. And lest we forget Accenture closed on its Procurian deal.

It was a busy 2014. And we expect much more in 2015.

Among other areas, we see continued consolidation happening in the “business network” segment. In the quest for growth, especially in the cloud, acquisitions are a de facto strategy. For example, in the direct procurement area, SAP can’t continue touting Ariba as its pony to ride here, and Oracle’s simplistic supplier network approach could definitely use bolstering.

On the supply side, there are many rather curious acquisition candidates for supply chain networks and indirect focused networks alike. As physical supply chain participants develop their “digital strategies” for the Internet of Things, the physical supply network will support a richer supply chain information network, but only to applications and larger technology stacks (i.e., cloud computing platforms) that can use that data in context of the business process.

Of course, the “usual” deals will happen as well. Suite vendors will round out their offerings through small strategic deals. Others will swallow smaller players and quietly kill off the products (or at least the innovation) to migrate them onto their own platforms. And perhaps most interestingly, we see both consultancies and BPOs blurring the solutions line by adding to their offerings as well, through inorganic growth.

Finally, let’s not forget all the PE money sitting on the sidelines.

If you’re curious to learn more about what drives valuation in the sector, read our Spend Matters PRO brief on the subject (written by our 2 resident M&A advisers and experts, Richard Lee and Jason Busch).

Stay tuned for our full 2015 predictions report, coming soon! Sign up below to receive the full report when it is released!





 

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