M&A

Inside Accenture's acquisition of ASM Research

Deal driven by 'once in a generation' opportunity

Accenture is buying ASM Research, a mid-sized government contractor with deep roots in the Army and in military health and Veterans Affairs.

An Accenture executive said the deal was driven by a desire for Accenture to bolster its federal health care practice. The addition of ASM “provides unique access points into the market,” said Jim Traficant, who leads Accenture’s military health business.


 

The Accenture-ASM Research deal was named best health care transaction of 2013.

Terms of the deal were not disclosed, but ASM is an employee-owned company with 480 employees. It was founded in 1975.

The company has customers in the Defense Department and VA, and while Accenture has an established government health care business, the acquisition will allow the company to bring more of its commercial health care work into the federal market, Traficant said.

“This is a once in a generation opportunity,” Traficant said, as many health care organizations are looking to revamp their benefit delivery and back office systems.

Accenture is very active in the commercial market in electronic health information and leveraging the data in those systems into knowledge that can help clinicians and payers make better decisions.

Traficant called it “insight-driven health care.”

Among the government contracts that ASM brings to Accenture is the $12 billion Veterans Affairs Transformation Twenty-One Total Technology program, known as T4. It is one of 14 primes on the contract, though VA is in the process of onboarding more.

According to Deltek’s database, ASM has won about $10.3 million in task orders under T4 so far.

The T4 contract is an example of one of ASM’s “unique access points,” Traficant said.

“The Defense Department and VA comprise the second largest health system globally,” he said. “And ASM is very active with both.”

The company also isn’t just a health IT provider. It works with the Army on force readiness and on a variety of training information systems and other human capital planning projects. Much of its work is in what Traficant described as “priority-spend areas for the government.” In other words, areas that will continue to be funded even in the midst of budget cuts.

The acquisition will be completed after a regulatory review, and Traficant will become president of ASM Research, which will be a subsidiary of Accenture Federal. He’ll retain his leadership role of Accenture’s military health group as well.

ASM is being set up as a subsidiary instead of being folded into Accenture so the company can retain the value of its brand name, Traficant said.

Current Chairman and CEO Jeri Lassiter will remain with the company through the transition, and will then continue as a consultant. The rest of the ASM management team is expected to remain on board.

Lassiter has been with ASM for more than 30 years, according to her bio on the company webpage. She became CEO in 2001 when the company had 160 employees, and has led its growth to 480.

The investment bank KippsDeSanto was an advisor to ASM Research in the transaction.

Traficant said that ASM had been approached by interested suitors and decided to conduct a competitive process to find a buyer.

He declined to comment on the value of the transaction.

The acquisition of ASM is the first deal by Accenture Federal since 2007, when it acquired Gestalt and Maxim Systems, two defense consulting businesses.

Traficant said acquisitions remain part of Accenture’s growth strategy, but only when “it better serves our clients.”

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