Mergers and Acquisitions, MSP

ISG Acquires Alsbridge for IT Vendor Management Services

Chip Wagner
Chip Wagner
Michael P. Connors Michael P. Connors

Information Services Group, a market research firm, has acquired Alsbridge Holdings Inc. -- which promotes IT vendor management and digital business transformation services. The combined company will have 1,300 research and advisory professionals while supporting 75 of the latest enterprises in the world, ISG asserts.

In some ways, Alsbridge competes with VARs, managed services providers (MSPs) and IT consulting firms that help customers to optimize their service provider relationships. Vendor management -- helping customers to get their CapEx and OpEx costs under control -- has been a growing MSP opportunity in recent years. On the flip side, the combined company will help service providers with a range of emerging market opportunities.

Michael P. Connors remains CEO of ISG, which will tuck Alsbridge into the company. Alsbridge CEO Chip Wagner becomes president and partner of ISG Business and Emerging Services, a new position.

According to a prepared statement, the ISG-Alsbridge combination will focus on:

"digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; technology strategy and operations design; change management; market intelligence and emerging technology research and analysis."

Expanded IT Expertise

Alsbridge brings to ISG four key new or complementary service lines to ISG, the companies said. They include:

  1. Network Carrier Services, which provides sourcing, audit and transformation services covering more than $1.5 billion worth of client spend each year with major telecommunications carriers, ISG said.
  2. Robotic Process Automation (RPA), which provides assessment, strategy and implementation services to clients looking to leverage RPA to make business processes more efficient as part of their overall digital transformation programs, ISG said.
  3. Outsourcing Advisory, which expands ISG's sourcing advisory business. Combined, the "new" ISG advises on nearly $18 billion of transactions globally, ISG said.
  4. Provider Services, which helps service and technology providers identify market opportunities and improve pursuit effectiveness and business retention with a range of subscription-based services and data, the company said.

With this broader portfolio of services, the "new" ISG will have significant cross-selling opportunities with its expanded client base, including the ability to offer new services to its existing clients and to leverage its global footprint and capabilities to expand Alsbridge's U.S. client relationships.

Alsbridge Deal Value, Job Cuts?

ISG is paying $74 million for Alsbridge. The sum includes $56 million of cash, $11 million of ISG stock and a $7 million seller's note. In a separate transaction, existing ISG shareholder Chevrillon & Associes SCA is purchasing 3 million shares of ISG stock for $12 million. Proceeds will be used for working capital and general corporate purposes.

It sounds like ISG will also cut some jobs while digesting Alsbridge. Indeed, ISG will take a fourth-quarter, one-time charge of approximately $6 million for severance and other deal-related costs, the company said.



Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.