An affiliate of Bain Capital Private Equity has agreed to acquire Guidehouse, a McLean, VA-headquartered management and technology consultancy, for $5.3 billion.
Guidehouse, which has 17,000 professionals in 55+ locations globally, will continue to operate under its current management team led by CEO Scott McIntyre.
The deal will see Veritas Capital exit Guidehouse, which it acquired in 2018. The consultancy was formed that year after Veritas acquired and spun off PwC US’ public sector practice. Veritas subsequently made several major bolt-on acquisitions to bolster the firm’s geographical reach, capabilities, and sectoral scope. Foremost among them were Navigant Consulting in 2019 (5,000+ people), Dovel Technologies in 2021 (1,800+ people), and Grant Thornton’s public sector practice in 2022 (480+ people).
Guidehouse provides management, technology, and risk consulting, as well as digital services and business process outsourcing, to public and private sector clients. The firm serves a range of industries, including defense & security, energy, infrastructure & sustainability, financial services, and health.Guidehouse says its annual revenue has grown from $600 million in 2018 to a projected $3-billion+ in 2023.
“On behalf of the entire Guidehouse team, we're delighted to embark on the next phase of our growth in partnership with Bain Capital who shares our people-first culture, consulting heritage, and commitment to embracing complexity,” McIntyre said in a press release. “Together, we see significant opportunities to capitalize on attractive marketplace dynamics to further grow the business with our best-in-class client delivery capabilities.”
McIntyre told The Wall Street Journal that he expected Veritas to hold Guidehouse for four to six years.
The Bain acquisition arrives during a downturn in private equity activity in the consulting industry and the broader market. PE firms went on a spending spree in 2021 and 2022, but money has been less free in 2023.
This year in the US, there have been 31 management consulting M&A deals worth a total $100 million through to November 2, down from 37 deals worth $1 billion in the prior-year period, according to Dealogic.
Consulting firms are also seeing slower revenue growth after a pandemic boom. US consulting is projected to grow by 8% to $94 billion in 2023, down from 10.5% in 2022 and 11.1% in 2021, according to stats from Source Global Research.
“Guidehouse has established a clear leadership position in its space using a differentiated model built on collaboration, expertise, and great execution,” said Joe Robbins, partner at Bain Capital. “We are excited to partner with Scott and his proven management team to continue growing organically and inorganically in an industry with strong, long-term fundamental tailwinds.”
Bain Capital was founded in 1984 by partners from consulting firm Bain & Company, including Mitt Romney. The Boston-based private investment firm has $180 billion in assets under management.
Sourced from Consulting.US