Altran sold Arthur D. Little through Management Buy-Out

27 December 2011

Altran has sold Arthur D. Little to the management of the consulting firm through a Management Buy-Out (MBO). The Memorandum of Understanding (MoU) was signed early November and the closing of the transaction is on December 30, this way the advisory firm is no longer part of the Altran Group by January 2012. It is unknown how many partners are involved in this global buy-out.

No surprise

The sale of Arthur D. Little does not come as a surprise to analysts for several reasons. Firstly, the potential divestment has been subject of discussion over the past 6 months. In the shareholder meeting of June, Altran CFO Laurent Dubois mentioned that “Altran was evaluating its strategic options for Arthur D. Little”. After the announcement of Altran’s new strategy, it became clear that strategy consulting firm Arthur D. Little would no longer fit in Altran’s future strategy. "A strategy consulting office does not fit in our portfolio anymore” said Altran CEO Philippe Salle in November. This sale is “the first practical application of our renewed strategy” according to the chairperson.

Arhur D Little

Disappointing financial results

Secondly, Arthur D. Little has been heavily hit by the crisis in 2009: global turnover dropped in the following financial year with an expected 40%.  In the past year, the advisory firm, despite a slowly decreasing turnover, (Q3 turnover of €25 million against €26,4 a year earlier), made a global recovery. The fact Arthur D. Little only added a few percent to Altran’s global revenue of more than €1 billion, in combination with the disappointing financial performance, was a further reason for the Altran management spin-off ADL.

ADL since 2002 part of Altran

Arthur D. Little has on average 500 consultants scattered over 26 offices in over 20 countries working. The advisory firm, since 2002, is part of Altran Group. After ADL mid 20001 was having big financial problems, it undertook a search for an acquisition or merging partner. After failed negotiations with Mercer, Monitor and PA Consulting Group, the advisory firm was sold to Altran by April 2002 during an auction. Niche branches of ADL situated in the United States were sold to American advisory firms, including Associates and Navigant Consulting.

Many months leading up to selling Altran, the renowned consultancy firm lost almost all partners of Arthur D. Little in the Netherlands. Fifteen ADL advisors decided to found a new advisory firm Quintel Strategy Consulting (in January 2011 Quintel is taken over by A.T. Kearney). Apart from this, multiple advisors switched to rivals. For example, Tyo Collot d’Escury and Jochem Moerkerken (meanwhile partner at Bain & Company) made a switch to Roland Berger Strategy Consultancy.