Capgemini and IBX deal sparks interest

15 February 2010

16 February 2010 | Jake Kanter

Capgemini’s purchase of e-procurement firm IBX could herald a wave of similar acquisitions, according to experts.

The consultancy acquired IBX this month and will use the Swedish company’s technology alongside its procurement outsourcing services.

The two firms have been collaborating for the past year. David Poole, Capgemini’s head of business process outsourcing in the US, said clients were demanding a service that combined e-sourcing and outsourced purchasing. He expects the buyout to spark a trend in the market.

“I would be surprised if we didn’t see similar moves. Our competitors are likely to respond rapidly,” he told SM. “Where previously companies were purchasing technology and outsourcing independently, that discussion goes away. We are seeing a lot of interest from a number of clients.”

Katrina Menzigian, a vice-president at the Everest Research Institute also predicted consolidation.

“The procurement technology market is not as concentrated and consolidated as, say, the HR technology market. There a number of proven small suppliers out there,” she said.

Rachael Stormonth, vice-president at analysts NelsonHall added that the deals was “very exciting” for procurement outsourcing and would increase competition among suppliers.

Capgemini’s acquisition of IBX should be finalised by the end of the month, subject to clearance from anti-trust authorities. Both firms refused to disclose the financial terms of the deal.

Capgemini is expected to announce an extensive sourcing deal with an undisclosed client using the combined services.

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