Solucom set to acquire large share of Kurt Salmon

24 November 2015

French consulting firm Solucom is on the verge of acquiring a large share of Kurt Salmon, excluding the retail and consumer goods advisory units. If the deal goes ahead, roughly 750 consultants in France, Switzerland, Belgium, Luxembourg and Morocco will transfer to Solucom, as well as employees based across four offices in the United States.

With over 1,500 employees in France, the UK and three other countries in the EMEA region*, Solucom is one of the larger management and IT consulting firms in Europe. The firm was founded in 1990 by Michel Dancoisne and Pascal Imbert, who still hold a controlling interest in the firm, and over the past 15 years the company has evolved from a telecoms and IT security specialist in the early years to a diversified player offering services across the advisory landscape.


In 2011, at the height of the financial crisis’ aftermath, Dancoisne and Imbert agreed a bold ambition, aimed at, in the space of four years and against the tide growing Solucom into the largest consulting firm in France. Delving into the numbers shows that, across the board, the execution of the growth strategy has since been impressive. The following year Solucom acquired Alturia Consulting and Eveho (both with a focus on the insurance sector) and Stance (business transformation), while between 2014 and May this year the business advisory poached another three firms: Lumens Consultants (HR advisory), Trend Consultants (retail banking) and Audisoft-Oxea (finance). Expansion was also realised beyond France’s boundaries, with new offices opened in Morocco (2012; organic expansion), the UK in (2015; through the acquisition of London-based Hudson & Yorke) and Switzerland (2015; following the purchase of Geneva-based Arthus Technologies). 

On the back of the acquisition spree, Solucom can now in call itself one of the larger players in its home-market, an industry valued to be worth just over €4 billion. Building on the expansion path, the firm’s leadership earlier this year unveiled further appetite and growth plans, as part of the new strategic vision, which centres around an accelerated geographic expansion, with the goal of turning Solucom into the industry’s top ranks by 2020 when it comes to size and reputation. Five months after disclosing the plans, one of the first major steps has unfolded, with the acquisition of Kurt Salmon on the brink of being agreed.

Kurt Salmon - Succes for whats next

Yesterday Solucom announced that it has entered exclusive negotiations with Management Consulting Group (MCG), the parent company of Kurt Salmon and Alexander Proudfoot, to acquire a considerable share of Kurt Salmon. The business in scope of the deal comprises Kurt Salmon’s operations in France, Switzerland, Belgium, Luxembourg and Morocco, as well as the Financial Services and CIO Advisory practices of Kurt Salmon in the United States. The consumer goods and retail consulting activities outside of France, notably Kurt Salmon UK and Kurt Salmon Germany, are not part of the transaction.

The deal is expected to be completed later this year, and if so, ends a long period of uncertainty hanging above Kurt Salmon. The management consultancy has repeatedly been linked as an acquisition target ever since the firm, according to analysts, overplayed its cards back in 2013 and 2014. Kurt Salmon was founded in January 2011 by the merger of Ineum Consulting and Kurt Salmon Associates (KSA). At the time of the merger, Ineum Consulting (formed as a spin-off from Deloitte France's consulting division) had approximately 1,300 employees mainly in EMEA, while KSA’s heritage traces back to the early 1930s in the United States. The merger was designed to bring the new and larger Kurt Salmon economies of scale, paving the way for a more sustainable and profitable level of business, and position the consultancy for international growth.

Globally, the firm had set the goal to become a top 10 global management consulting firm by 2016, said Chiheb Mahjoub a few years ago, while in France, the firm’s largest markets (~500 consultants) the advisory had set the ambition to become a top 3 player by 2017. Continued market pressures, along with challenges fully integrating its European operations, including partners pointing their noses into different directions say insiders, have frustrated the firm reaping the full merger synergies, as well as overall potential. In Q1 this year two of the Big Four giants reportedly showed interest in capitalising on the opportunity, and by May EY came an inch away from buying (parts of) Kurt Salmon – the deal was however blown off late in the negotiations process. The rumours persisted though, and in June this year parent MCG even felt the need to react to the reports in the market, stating that the Board has been approached by “certain parties” and that “discussions are on-going”.

 Pascal Imbert - Michel Dancoisne - Chheb Mahjoub - Bernard Desprez

Five months down the line MCG has taken its transparency a step further and confirmed it is close to a deal with Solucom. Last Friday, works councils of both parties met to discuss details, and once concluded, the deal could rapidly be closed, says Solucom. Following integration, Solucom will add a range of strategic and business skills to its portfolio, with in particular Kurt Salmon’s CFO and CIO Advisory practices renowned for its strong track record. The business in scope has a combined staff of 750 employees, generating revenues of €120 million, and is performing relatively well at the moment, with a pro-forma operational margin of approximately 8%.

Kurt Salmon Retail
If the deal goes ahead, Kurt Salmon’s retail and consumer goods practices – which are performing well states MCG – will continue operations as is, with no further details on positioning and branding know at this moment in time. Just last month Kurt Salmon acquired Mobispoke in the US, and rebranded the firm as Kurt Salmon Digital, spearheading the launch of its digital intentions.

Earlier this year highlighted the development of Sia Partners, another French-origin consulting firm that is expanding strongly of late globally through acquisitions (e.g. Investance in 2013) and organic growth (e.g. new offices in Japan and North Carolina, US).

* Belgium, Switzerland and Morocco.


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