ISG Acquires Alsbridge in Transformational Combination

December 13, 2016

Information Services Group, Inc. (ISG) (NASDAQ: III) announced the acquisition of Alsbridge Holdings, Inc. (“Alsbridge”), a U.S.-based sourcing, automation and transformation advisory firm, to create a new industry powerhouse in technology research, advisory and digital transformation services.

The “new” ISG will serve more than 700 blue-chip clients – including 75 of the 100 largest enterprises in the world – up 35 percent from ISG alone, and its global team will grow by approximately 20 percent, to 1,300 research and advisory professionals. The firm will offer a broader range of services, deeper proprietary data and market intelligence, and more extensive expertise to help enterprise, government, and service and technology provider clients leverage digital technologies to achieve operational excellence.

The combined firm’s expanded capabilities include digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; technology strategy and operations design; change management; market intelligence and emerging technology research and analysis.

“This is an exciting and historic moment for our firm and all of our stakeholders,” said Michael P. Connors, chairman and chief executive officer of ISG. “With this compelling combination, we are creating a ‘new’ ISG – one with a stronger market position and a broader, more valuable portfolio of automation and digital services, market intelligence and advisory capabilities to guide our clients on their digital transformation journeys. This is truly a transformative move that takes us to the next level of service, performance and growth.”

“We have long admired the strong team at ISG. By combining and integrating our service offerings, we are creating a new industry leader that redefines the research, sourcing and digital technology advisory market,” said Chip Wagner, chief executive officer of Alsbridge who will become president and partner of ISG Business and Emerging Services, a new position. “The ISG and Alsbridge businesses, cultures and values all mesh extremely well. It really is a case of the whole being greater than the sum of the parts.”

Combination Offers Compelling Strategic and Client Benefits

With the combined capabilities of ISG and Alsbridge, the “new” ISG is now able to offer clients of both firms an expanded portfolio of differentiated services. Alsbridge brings to ISG four key new or complementary service lines:

– Network Carrier Services, a new service line for ISG that provides sourcing, audit and transformation services covering more than $1.5 billion worth of client spend each year with major telecommunications carriers.

– Robotic Process Automation (RPA), a new service line complementary to ISG Digital Services, that provides assessment, strategy and implementation services to clients looking to leverage RPA to make business processes more efficient as part of their overall digital transformation programs.

– Outsourcing Advisory, a complementary service that expands ISG’s already market-leading sourcing advisory business. Combined, the “new” ISG advises on nearly $18 billion of transactions globally.

– Provider Services, a complementary service to ISG’s research and provider advisory services, helps leading service and technology providers identify market opportunities and improve pursuit effectiveness and business retention with a range of subscription-based services and data.

With this broader portfolio of services, the “new” ISG will have significant cross-selling opportunities with its expanded client base, including the ability to offer new services to its existing clients and to leverage its global footprint and capabilities to expand Alsbridge’s U.S. client relationships.

Transaction Creates Value for ISG Shareholders

ISG expects its acquisition of Alsbridge will deliver significant financial benefits to the firm and create long-term value for ISG shareholders.

The combination produces substantial synergies through combined efficiency and growth. ISG expects to generate $7 million of annual cost savings within 18 months. These synergies will improve EBITDA margins and drive organic growth.

This synergistic transaction is expected to have a material impact on 2017 financials. The firm’s preliminary 2017 outlook targets revenues in the range of $285-$300 million and adjusted EBITDA between $36-$38 million, and ISG expects the transaction to be accretive to 2017 earnings per share.

“This acquisition is an important step in ISG’s strategic plan to build an even stronger and more successful premium research and advisory firm – one focused on helping clients leverage the technology and business models of the digital revolution to achieve operational excellence and faster growth,” Connors said.

Financial Structure of the Transaction

ISG is paying a total consideration of $74 million, comprised of $56 million of cash, $11 million of ISG stock and a $7 million seller’s note. To align their interests with those of ISG shareholders, Alsbridge management will receive a substantial portion of their consideration in the form of ISG stock.

Additional Equity Investment Made in ISG

In a separate transaction, existing ISG shareholder Chevrillon & Associes SCA is purchasing 3 million shares of ISG stock for $12 million. Proceeds will be used for working capital and general corporate purposes. “As a shareholder of ISG since 2011, we are in full support of Mike and the ISG management team and the long-term growth strategy they have set for the firm,” said Cyrille Chevrillon, president. “We view this transformational transaction as a key component of this growth strategy, and in support of it, we are pleased to make a significant additional investment in the firm.”

Fourth Quarter 2016 Charge

ISG will take a fourth-quarter, one-time charge of approximately $6 million for severance and other deal-related costs.


BMO Capital Markets served as financial advisor to ISG, and Katten Muchin Rosenman LLP served as legal advisor.


About ISG

ISG (Information Services Group) (NASDAQ: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including 75 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; technology strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit