ISG acquires Alsbridge Holdings for total consideration of $74M
Information Services Group, or ISG, announced the acquisition of Alsbridge Holdings to create a new industry powerhouse in technology research, advisory and digital transformation services. The "new" ISG will serve more than 700 blue-chip clients - including 75 of the 100 largest enterprises in the world - up 35% from ISG alone, and its global team will grow by approximately 20%, to 1,300 research and advisory professionals. The firm will offer a broader range of services, deeper proprietary data and market intelligence, and more extensive expertise to help enterprise, government, and service and technology provider clients leverage digital technologies to achieve operational excellence. ISG expects its acquisition of Alsbridge will deliver significant financial benefits to the firm and create long-term value for ISG shareholders. ISG expects to generate $7M of annual cost savings within 18 months. These synergies will improve EBITDA margins and drive organic growth. The firm's preliminary 2017 outlook targets revenues in the range of $285M-$300M and adjusted EBITDA between $36M-$38M, and ISG expects the transaction to be accretive to 2017 earnings per share. ISG is paying a total consideration of $74M, comprised of $56M of cash, $11M of ISG stock and a $7M seller's note. To align their interests with those of ISG shareholders, Alsbridge management will receive a substantial portion of their consideration in the form of ISG stock. In a separate transaction, existing ISG shareholder Chevrillon & Associes SCA is purchasing 3 million shares of ISG stock for $12M. Proceeds will be used for working capital and general corporate purposes. "As a shareholder of ISG since 2011, we are in full support of Mike and the ISG management team and the long-term growth strategy they have set for the firm," said Cyrille Chevrillon, president. "We view this transformational transaction as a key component of this growth strategy, and in support of it, we are pleased to make a significant additional investment in the firm." ISG will take a fourth-quarter, one-time charge of approximately $6M for severance and other deal-related costs.