Kroll Acquires CVM Solutions: The Supplier Management and Enrichment Market Gets More Interesting

Earlier today, CVM Solutions announced internally (to employees) that they were being acquired by Kroll, a division of Altegrity, a PE-backed holding company claiming to be the "largest commercial provider of background investigations for the U.S. government," among other services and solutions. Altegrity has three divisions: USIS, a "commercial provider of background investigations to the federal government and a major provider of global security and training services"; HireRight, a "provider of on-demand employment background screening, drug and health screening, and employment eligibility solutions that help employers automate, manage, and control screening and related programs"; and Kroll, a "risk consulting company [that] provides a broad range of investigative, intelligence, financial, security, due diligence, and technology services." Based on the announcement to CVM employees today, we expect a public announcement of the acquisition shortly.

CVM Solutions was the last remaining small, independent provider of supplier enrichment content and software. SciQuest acquired its closest rival, AECSoft, earlier this year (the announcement was made last December, however). CVM had made a bit of a splash in the sector moving to the Force.com development platform and stack, and away from a .Net development environment. The company had been rumored to have been on the acquisition block, which makes sense, as its solutions are certainly a better fit wrapped around a broader offering with the reach a larger, more established organization can provide. CVM's supplier management bread and butter over the years stemmed largely from the relationships it developed through selling supplier diversity content and enrichment data. Much like AECSoft, it used these relationships to get a foot in the door to sell broader supplier management (e.g., enablement, risk, diversity) and supplier enrichment software and content deals.

For those outside the industry, the deal might seem a bit like a synergistic stretch. But under the surface, there appears to be a significant amount of synergy (stay tuned as we investigate this further). And more broadly speaking, the likely forthcoming announcement is representative of a significant ramping of new large company interest in the supplier management market. In fact, we've heard from half a dozen often large and brand name organizations in recent months that are either getting into this market or are curious about it. Many appear to be targeting the vetting, qualification, monitoring and enablement of global suppliers with ideas that span a range of onsite services, software capabilities and enabling content.

Spend Matters believes this pending announcement is exciting news for the sector, and its ability to provide broader reach for CVM will apply pressure to global market leaders such as D&B, Bureau Van Dijk and others to innovate. It could also serve as a catalyst to drive consortia models like Achilles in new directions and geographies. Last, it's also the second major acquisition in the supplier management market in recent months, following on the heels of Emptoris' acquisition to buy Xcitec, a Germany-based provider of applications in the area. Stay tuned for further analysis of the acquisition shortly.

In the meantime, if you're curious to learn more about the subject of supplier management, you can download some of our free research reports in the area:

Leveraging Supplier Management Platforms for Multiple Goals: Risk Reduction, Supplier Diversity and CSR

Supply Risk Management – Segmenting the Technology and Content Landscape and Choosing the Right Category of Solutions

Beyond Basic Scorecarding – Supplier Performance and Development Approaches to Drive Competitive Cost and Risk Advantages

Jason Busch