What to Expect in M&A Activity in 2016: Jason Busch Weighs In


M&A activity was big in 2015, and as stated in a previous post, Spend Matters believes these deals will continue to have an impact on procurement organizations in 2016. Jason Busch, founder and head of strategy at Spend Matters, recently shared his additional thoughts on M&A trends for 2016. His comments are below:

More Financially Focused Deals

“We’ll see an increase in ‘forced marriages’ as investors look to either salvage or increase the value of existing investments. This will dictate some combinations of providers that look more like financially oriented acquisitions rather than strategic ones. This could include some divestitures of business units within mid-size and large providers as well.”

Suite Providers Fill Holes, Ramp up Solutions

“Expect providers with holes to finally fill them in in 2016. For example, Infor can and should acquire a procurement or direct procurement suite provider, to complement its acquisition of GT Nexus.”

“Also, expect suite providers to get more serious about the management of supplier information, supplier data, master data management and initiative-driven vendor management efforts. This is a gap that we expect both high-growth (e.g., Coupa) suite providers and specialized e-procurement vendors (e.g., BuyerQuest) will fill, either organically or through acquisition.”

Oracle Goes Big

“I’d bet my cards on Oracle making (finally) a big, non-organic move in the space. While Oracle’s cloud-based efforts are bearing fruit with the platform/suite formerly known as Fusion — and while E-Business Suite and PeopleSoft SRM continue to chug along — we believe Oracle will look at SAP’s success and want to similarly turbocharge its efforts in procurement. But therein lies the rub — only a handful of providers are large enough and fit the Oracle software mold from an acquisition perspective.”

Services Procurement Sector Will be Active in 2016

“Look for a shakeout and consolidation in the services procurement sector in the new year, especially the emerging world of talent marketplaces and worker intermediation platforms. While we would not count out either of the Big Three vendor management system (VMS) providers (Fieldglass/SAP, Beeline and IQNavigator) making further acquisitions in the sector based on the strategic value they can bring to customers, we expect a lot of the consolidation activity to happen outside of the traditional contingent workforce  management space — e.g., supporting the management of freelancers, independent contractors, vertical specific needs, horizontal specific need, value added services (e.g., on-boarding, credentialing) and complex/specialized categories.”

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