cc-hubwoo Picks Up Intersources (not InteSource)

Thanks to a reader comment on Spend Matters this morning, I was alerted to this recent acquisition press release that notes cc-hubwoo has acquired Intersources. For those who have not heard of Intersources, they're a small services player in the European Spend Management landscape (around $5 million US in revenues last year). The complete deal numbers are in the above-linked press release, but I'll say one thing. And that's the valuation does seem generous (potentially beyond a 2x on revenue based on an earn out provision in the agreement).

While I'm not overly familiar with Intersources specifically, I know at least a dozen or so similar boutiques which have built solid practices by providing more nimble capabilities and pricing than the Big 5 for both process and technology consulting work in the Spend Matters field. Interestingly, boutiques like Intersources often price their services at parity with larger firms on a day rate base (but still undercut the strategy firms and AT Kearney, mind you). However, they can often get away with smaller project teams and shorter duration assignments, which leads to lower costs for clients.

In a related note, this deal announcement comes at a good time given my recent research into cc-hubwoo -- I started looking at them a couple of weeks ago. In fact, I plan to post an update into their activities later this week. Stay tuned! And who knows ... perhaps this deal will provide the initiative for them to change their name (which they desperately need to do, IMHO). But in the meantime, if you have anything to say about this deal and its implications for the European market, please post a comment. I'd be curious to get a Continental perspective on it.

Jason Busch

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