AlixPartners eyes next phase of growth with new ownership structure

14 November 2016 Consultancy.uk

Jay Alix, founder of AlixPartners, has joined forces with three investors to acquire the firm from CVC Capital Partners, the private equity group that bought the global management consultancy four years ago. As part of the change of ownership – the transaction values the consulting firm at more than $2.5 billion – AlixPartners has drafted ambitious growth plans for the years to come.

AlixPartners was founded in 1981 by Jay Alix, initially as an advisory focused on crisis management and turnaround services. On the back of its work for several high profile bankruptcy cases, including General Motors’ Saab division, Kodak and JC Penney, AlixPartners in the intervening period built a reputation as one of the globe’s leading restructuring consultancies.

Over the past 35 years the firm has also diversified toward a broader management consulting and financial advisory firm – today AlixPartners offers services spanning strategy, organisational effectiveness, performance improvement, mergers & acquisitions, investigations, disputes and risk, digital transformation and information management.

From 950 employees to 1,600 professionals

In 2012, the privately-held firm was acquired by CVC Capital Partners, a private equity and investment advisory firm which today manages over $33 billion of assets. CVC bought the firm from its previous owner, Hellman & Friedman, another private equity group, which held a majority stake in the firm for a six year period. Under Hellman & Friedman’s direction, AlixPartners nearly doubled in size to, at the time, 950 employees, with the private equity firm feeling 2012 was the appropriate time for an exit. While AlixPartners’ CEO at the time, Frederick Crawford, was also considering going public, he concluded that the timing wasn’t right, amidst the knock on effects of the financial crisis and the broader developments in the professional services industry, and agreed to the sale to CVC.

AlixPartners eyes next phase of growth with new ownership structure

In the past four years, AlixPartners has managed to successfully come through another phase of growth, and today the firm has nestled itself as an established full-service consultancy in between the likes of the strategy consulting firms and the larger players such as the Big Four (Deloitte, PwC, EY and KPMG). The consulting firm’s footprint has grown from 950 to more than 1,600 professionals, operating from 25 offices on four continents, compared to 17 offices back in 2012. Growth was driven by organic expansion across sectors, and further lifted by two major acquisitions. Evidence Exchange, a US-based litigation consultancy with 30 professionals, was picked up in 2014, and last year AlixPartners bought Zolfo Cooper, adding around 200 financial advisory specialists to its footprint in the UK.   

Next phase of growth

The latest change of ownership sees CVC Capital Partners sell its share to a consortium of four investors: Caisse de dépôt et placement du Québec (CDPQ; one of Canada's larger institutional fund managers), Public Sector Pension Investment Board (PSP Investments; a pension investment manager also from Canada), Investcorp (a US-based alternative investment manager) and Jay Alix, the firm’s founder and current shareholder. As part of the transaction, AlixPartners’ Managing Directors will continue to hold a “significant stake in the firm”, says Alix, and have access to a new equity system.

Commenting on the deal, Simon Freakley, Chief Executive Officer of AlixPartners and former Zolfo Cooper CEO – he took over the helm from Crawford on Janaury 1 this year – says he is “very grateful to CVC”, stating “they shared our vision and played an integral role in the firm’s growth over the last four and a half years.”

Under the wings of the new owners, Freakley says that he aims at propelling the firm into its next phase of growth. “The commitment of this group of long-term shareholders will enable us to continue our strong growth trajectory”, says Freakley, without releasing any further details on ambitions or concrete targets.

Services of AlixPartners

In a combined press statement, the private equity groups that backed the deal, not surprisingly, highlight the confidence they have in Freakley and the firm’s leadership in realising the plans on the table. Roland Lescure, Chief Investment Officer and Head of Private Equity at CDPQ, heralds AlixPartners’ “strongly diversified business model” and its deep expertise “that is now sought after worldwide”, while Guthrie Stewart, Global Head of Private Investments at PSP Investments, points at the firm’s “leading market position and outstanding entrepreneurial culture”, two factors he believes will drive its continued success. And, David Tayeh, Investcorp’s Head of Corporate Investment for North America, places the quality of the firm’s Managing Directors in the spotlights.

Fast track growth in the consulting industry, an industry valued at $125 billion globally, with the US holding a 44% share, will however by no means be an easy ride for Freakley. A range of trends such as changing demands from clients, and the heightening of pressures on the back of automation, globalisation, democratisation of top tier knowledge and the rise of the gigeconomy, among others, mean that competition is heating up. In addition, the high growth areas within consulting are shifting toward a number of areas that sit outside the traditional management consulting space, such as design, digital and cybersecurity – areas in which AlixPartners still, according to analysts, has a way to go in terms of capabilities and reach. 

Asked how AlixPartners stands out from the rest of the consulting firms out there, the CEO states, “Our unique approach, assigning experienced teams, acting quickly and delivering practical solutions for very complex problems, has been key to our success and allows us to work with some of the world’s largest companies.”

Simon Freakley, Chief Executive Officer of AlixPartners

Another challenge Freakley will face is maintaining the firm’s culture even as it seeks to expand its reach and realise its ambitions of becoming a bigger competitor to the larger full-service consultancies.

Chris Stadler, Managing Partner at parting investor CVC, remarks that he is confident the firm has what it takes to flourish, stating: “The firm has evolved into a leading, global advisory business that delivers significant value for its clients. I am confident that AlixPartners will continue to thrive under its new ownership structure.”

In preparation of the firm’s new growth phase, AlixPartners in September launched a new corporate identity, refreshing its logo (the blue and grey in its logo has been exchanged the white and more emphases on green), website and company-wide communications materials.

The transaction is expected to close by the end of 2016. The deal was supported by the Bank of America Merrill Lynch, Deutsche Bank and Goldman Sachs, who served as lead financial advisors to AlixPartners and CVC. Legal counsel was provided by Gibson, Dunn & Crutcher (to CVC), Paul, Weiss (to AlixPartners), Simpson Thacher & Bartlett (to CDPQ), Weil, Gotshal & Manges (to PSP Investments), White & Case (to Investcorp), and Willkie Farr & Gallagher (to Jay Alix).

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Fast growing consultancy Step5 rebrands for next growth phase

18 January 2019 Consultancy.uk

Innovative transformation consultancy Step5 has completed a rebranding of its corporate identity as it looks to push forward with rapid growth into a fifth successive year. CEO Howard Dickel told Consultancy.uk why the change in image is so important, and how the consultancy as a whole has grown in recent years.

Step5 was established in 2010 by co-founders Clive Fenton (current Chairman) and Jim Berrisford (incumbent COO). In 2014, the firm’s present CEO Howard Dickel joined, a year before Step5 hit £1 million in turnover. Building on that, for the past four years Step5 has enjoyed growth of more than 30%, and now boasts more than £1 billion in programme budgets managed and an expanding team of over 60 consultants.

Dickel took up the top job at the company last year, and is now keen to kick on from the firm’s recent success, particularly after Step5’s recent rebranding. The new brand identity was developed with creative agency gt&i, and aims to capture the essence of the business today. Step5’s CEO believes this essence is “quietly confident, with an inner strength”, thanks to a diversity of unique skills among the firm’s talent, enabling Step5 teams to constantly innovate and surprise clients. According to Dickel, the rebrand marks the next stage in the company’s development, supporting Step5’s aim to compete on a world stage.

Fast growing consultancy Step5 rebrands for next growth phaseExplaining the firm’s new identity further, Dickel told Consultancy.uk, “High value, high cost strategic consultancy provides insight but leaves the challenge of implementation.  Step5’s strength lies in bridging the gap.  We work closely with our clients to develop and deliver complex business transformation projects and get failing projects back on track.  In the words of our new strapline: Together we can.”

Step5 is one of the UK’s fastest growing business transformation consultancies, and as with many new competitors in the professional services sector, aims to offer clients an alternative to the Big Four. As is the case with other firms looking to do this, Step5 differentiates itself from the quartet’s ‘impersonal’ approach by working to develop a trusted partner relationship with clients and drive change from within companies.

Long-term ambitions

In order to tackle this challenge, Step5 remains on the look-out for forward-thinking individuals, whether already working in the sector or looking for something new. In the long term, its ambition is to grow within the private sector, and in particular the FTSE 250 companies, and to reach its target of £20 million in turnover by 2020.

Among clients already tapping into Step5’s services are the Ministry of Defence, BAE Systems, Barclays, Experian, Serco and Sopra Steria, among others. As well as building a reputation in the private sector, Step5 consultants have worked on some of the UK’s most challenging public and private sector initiatives – including the £1 billion recovery of the spine programme for the NHS and management and delivery of all telecommunications for the London 2012 Olympics.

Step5

According to Dickel, recent engagements are particularly encouraging for the firm moving forward. Lately, the firm supported a leading bank’s move into the £32 billion UK motor finance market, and worked to deliver a complex organisational transformation programme for the world’s leading information services company to better support its strategic goals and deliver savings across all services.

Dickel added, “We also transformed an internal IT function for a European leader in digital transformation, including people, process, operating model and market positioning. This has provided them with a robust, industry best practice function that delivered savings across the company and increased the internal IT capability from an Application, Infrastructure and Management perspective.”

Reflecting once more on the rebrand, he concluded, “Step5 offers clients an alternative to the Big Four consultancies – and it is recognised by its clients as the people who make complex business transformation projects happen... Step5 has grown and developed over the years. The company has come a long way and now it’s time to transform itself to reflect that.”