10/13/09 2:25 pm – TowerGroup announces acquisition by Corporate Executive Board
Corporate Executive Board has announced that it will acquire TowerGroup from MasterCard Advisors for an undisclosed price. MasterCard Advisors, a subsidiary of MasterCard International, acquired TowerGroup in February 2004 from Reuters Enterprise. Reuters acquired TowerGroup in 1999.
Many of you might not be familiar with the Corporate Executive Board. The CEB is a research and education firm that delivers data and tools, best practice research, and peer insight to enterprise executives and professional staff. It is a public company (NASDAQ: EXBD) with revenue of $228m and net income of $18m in 1H09. It has more than 5,100 client companies and 120,000 members. Its business model is primarily built on annual subscriptions with access to published research, inquiries with researchers, and access to peers through networking councils. So CEB sounds like an IT advisory analyst firm like Gartner in many respects. However, CEB does not research technology markets and vendors like a Gartner or IDC, rather it focuses on best practices for managing a corporate function.
SageCircle has been briefed by TowerGroup. Our analysis is that the TowerGroup acquisition is clearly an expansion of Corporate Executive Board’s services and not a consolidation move to eliminate a competitor. This is similar to Forrester’s Giga acquisition, but different from Gartner’s grab of META which was clearly a strategic move to keep META out of Yankee Group and kill a competitor. Regardless of motivation, it is still possible that Corporate Executive Board will lose many of the analysts unless they execute the integration correctly. CEB has six primary practice areas, including Information Technology and Financial Services. These two areas obviously overlap with TowerGroup.
Related post: Is there an acquisition coming in the analyst ecosystem? October 8. 2009
SageCircle Technique:
- Request a briefing by TowerGroup executives on the change in ownership and plans for changes to the firm’s business model and methodologies
- AR teams should review their analyst lists and anticipate how their outreach priorities might change if an relevant TowerGroup analyst leaves the firm
SageCircle clients have received a SageFlash about the acquisition with additional analysis and a broader set of recommendations. If you would like to speak with a SageCircle strategist about this M&A event in the analyst ecosystem, please contact SageCircle at 503-636-1500 or “info [at] sagecircle [dot] com” to arrange for a complimentary inquiry.
Bottom Line: While there are no immediate plans for major changes at TowerGroup, these sorts of events can have an unsettling effect on employees. TowerGroup clients and analyst relations teams with TowerGroup analysts high on their analyst lists should monitor their top advisors and analysts about their plans to stay with the firm.
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