Is there an acquisition coming in the analyst ecosystem?

SageCircle has been picking up signals that there is a potential announcement about the acqusition of an analyst firm by another analyst firm. This announcment could occur as early as today, Thursday, October 8th.

  • 10/8/09 9:07 am PT — Initial post
  • 10/8/09 9:53 am PT — Added section about Forrester CEO’s comments at investor conference
  • 10/8/10:37 am PT – Added section about Gartner
  • 10/8/09 11:43 am PT – Added section about IDC
  • 10/8/09 12:13 pm PT — Added section Ovum

Ovum could use more heft to take on “The Big Two”

Ovum is seriously taking a run at the big two advisory firms, Gartner and Forrester (see  Ovum-Datamonitor Restructuring: Sufficient Critical Mass to Take on the “Big Two”?). However, it still needs more analysts and sales reps to accelerate its growth in the enterprise advisory research space. Acquisitions would be a logical complement to organic hiring to quickly grow.

Don’t discount IDC as a potenial buyer in an M&A event

While IDC has had three layoffs in the last 18 months (see this post), that does not mean it could not pull off a large acquisition. There is a difference between managing costs during a recession and having the financial strength to invest in the future. Remember, IDC acquired Meridien Research in November 2002 during the last recession. IDC could certainly be looking at bulk up one of its Insights companies to compete more effectively in the end user market.

Gartner is sitting on approximately $100 million in cash

Gartner has the financial strength (approximately $100 m cash plus $250 m line of credit), dedicated M&A team and success with acquisitons to make it a logical player in any analyst ecosystem acquisition event. During each quarterly earnings call, CEO Gene Hall makes it a point to discuss M&A strategy and opportunities, though obviously not specific targets.

Could Forrester be ready to pull the trigger on a purchase?

At the William Blair & Co. Emerging Growth Stock Conference on Tuesday, October 6th, Forrester Research Chairman and CEO George F. Colony mentioned several times about how acquisition targets are getting to be more realistic (worn down by the recession) and are starting to discuss attractive deal prices.

Colony also pointed out how three of Forrester’s four major acquisitions were very successful, which is a higher success rate than normal. He said that Forrester is very careful about M&A and that they “would look at a thousand balls before swinging.”

Forrester has $275 million in cash and short term securities as of 6/30/09 so it certainly has the resources to acquire most any firm except Gartner and IDC.

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