West Monroe, backed by a new investment from MSD Partners, is pursuing digital consultancy acquisitions, the two companies disclosed today.
MSD Partners was founded in 2009 by the partners of MSD Capital -- the family investment office for Michael Dell, founder & CEO of Dell Technologies.
Following the investment, which is expected to close in November 2021, MSD Partners wil own 50% of West Monroe. The leadership team at West Monroe will remain intact and the company will be jointly governed by a 50/50 split of representatives from MSD and the employee-owners of West Monroe, the companies said. Also, all West Monroe employees will have the opportunity to invest in and own part of the firm, the IT consultancy said.
MSD Partners Invests In West Monroe: Digital Consultancy Details
Among the additional details to note:
- West Monroe, founded in 2002, has 2,000 employees. The digital consultancy has a 30% CAGR (compound annual growth rate), though we don't know how much of that growth involved organic business development vs. acquisitions.
- West Monroe Chairman & CEO Kevin McCarty and the rest of the senior management team continue to lead the business.
- The investment will be used to expand "West Monroe's global product development platform via acquisitions; to advance skill-building programs for West Monroe employees to provide world-class digital consulting services; and to drive enhancements to its offerings and Intellio suite of assets, among other strategic imperatives," the company said.
West Monroe has been in acquisition ahead of the MSD Partners investment. Indeed, the company in September 2021 acquired Verys, a Santa Ana, Calif.-based product engineering services firm.
In fact, West Monroe has earmarked roughly $250 million on various digital initiatives as part of a larger Be Digital plan. Among the goals: Reach a $1 billion valuation by 2025. The company did not disclose its current valuation.
Digital Consultancy Investment: Executive Perspectives
In a prepared statement, Kevin McCarty, West Monroe chairman & CEO, said:
"This is the right time for West Monroe to take on a strategic investment from an investor who shares our long-term view on growth and client service. In MSD Partners, we selected a partner who believes in our strategy, our culture, our operating principles and the ability of our talented employees to achieve our goals. This investment will give us enhanced financial capabilities to fuel the next phase of West Monroe’s growth, as well as an investment partner with a long-term perspective and significant digital technology expertise."
Added John Civantos, co-head of MSD Partners’ Private Capital Group:
"The West Monroe team has built a special digital consulting firm. Their unrelenting drive to do more and achieve more is reflected in their differentiated culture, which has been the fundamental pillar supporting the strong growth the company has achieved to date. We’re excited to partner with West Monroe in their next chapter and share their commitment to capturing the significant opportunities that lie ahead."
Concluded Steven Lamb, a managing director in MSD Partners’ Private Capital Group:
"Our partnership with West Monroe has all of the hallmarks of an MSD investment. We could not be more thrilled to back such a wonderful management team in executing its strategy."
