Mergers and Acquisitions, IT management, Enterprise, Mergers and Acquisitions, SI

Wavestone Acquires CIO Advisory, Management Consulting Firms

Three white jigsaw pieces on blue background.

Wavestone has acquired Coeus Consulting, a CIO advisory and management consulting firm. The deal surfaced a few weeks after Wavestone acquired management consultancy PEN Partnership. Together, the three companies are seeking to be "a leading player in the UK consulting market."

These are technology M&A deal numbers 874 and 875 that ChannelE2E has covered so far in 2022. See more than 2,000 technology M&A deals involving MSPs, MSSPs & IT service providers listed here.

Here's a bit more on each of the two deals and the associated valuation metrics.,..

PEN Partnership Acquired for 7.6X to 10.2X Annual Adjusted EBITDA

PEN Partnership, founded in 2012, is headquartered in London. The company has roughly 60 full-time employees and roughly 40 contractors. PEN Partnership supports financial services and life sciences clientele. The company's expertise spans:

  • Customer Experience & Digital;
  • Operations & Automation;
  • Data & Technology; and
  • Change Delivery & Capability.

PEN Partnership's revenues were £19.6m revenue for its fiscal year ending in March 2022, and adjusted EBITDA margin was 15% (roughly £2.94 million). The purchase price was £22.5 million in enterprise value, plus a potential earn-out of £7.5 million over the next 18 months.

Quick math suggests the deal therefore was valued at 7.6 times to 10.2 times adjusted EBITDA, depending on whether the earn-out is realized.

In a prepared statement about the Wavestone deal, PEN Partnership CEO Chris Gibson said:

"Wavestone and PEN Partnership together make a powerful combination and this is really great news for our clients and staff. The two companies provide complementary services and share very similar corporate culture and values. Wavestone has an ambitious growth plan and I am very excited for the PEN team to play a key role in building a leading consultancy player in the UK market.”

Reza Maghsoudnia, strategic development director of Wavestone, said:

“This merger enhances Wavestone's ability to deliver global transformation programs. With PEN Partnership, we can accelerate our growth in the UK and deepen our value proposition in Financial Services and Life Sciences globally. It's clear from our discussions with PEN Partnership that there are synergies not only in the services provided, but the company culture. There is strong alignment on topics such as CSR, Diversity & Inclusion, as well as Great Place to Work, and this is a key success factor for our project.”

Coeus Consulting Buyout Details

Coeus Consulting has IT expertise across energy, utilities, manufacturing and retail sectors.

Wavestone paid £17.5 million in enterprise value, plus a potential earn-out of £3.5 million. EBITDA multiples were not disclosed.

In a prepared statement about the deal, Coeus Co-Founders Ben Barry, James Cockroft and Rob Walker said:

“Wavestone and Coeus Consulting's combination perfectly addresses the CIO agenda. We both have a complementary value proposition and client portfolio, as well as close corporate values. In addition, the business consulting expertise of PEN Partnership in the Financial Services and Life Science industries creates an exciting opportunity for us to address the transformation challenges of our clients in these sectors with a holistic value proposition. We were amazed by the strong cultural fit and we believe that the project will provide our teams with numerous opportunities.”

Added PEN Partnership CEO Chris Gibson:

"We are very enthusiastic to have Coeus Consulting join our project. It strengthens and expands the expertise of our UK practice, particularly in the technology area, one of the most important levers for our Financial Services and Life Science clients to develop new services and offers as well as enhance their business and operational performance. Together, we are accelerating our growth agenda in order to position Wavestone as a preferred consulting firm for large enterprises.”

Concluded Reza Maghsoudnia, strategic development director of Wavestone:

“We were impressed by Coeus Consulting's ability to engage with very large enterprises at a very senior level. That says a lot about the expertise and value of the team. This project is a game changer and creates the conditions for a step change of dimension in the UK and, accelerates our globalisation.”

Wavestone now has roughly 4,000 employees across Europe, the United States and Asia.

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.