The Deal
Bain & Company is acquiring Sutton Place Strategies (SPS), a deal origination tool and transaction database for private equity firms, corporate M&A teams, and deal advisors.
SPS focuses on intermediaries and deals, giving actionable insights into the effectiveness of a private equity firm’s deal sourcing operation on both an absolute and relative basis. SPS clients input target sectors and company characteristics (investment size, EBITDA, employee count, location etc.) The platform then compares deals which the client saw with all the deals that happened in their space to provide intelligence on which intermediaries the firm should improve relations with. Additionally, SPS provides transaction advisors the ability to assess deal coverage and map the most relevant buyer universe.
The acquisition will complement Bain & Company’s growing suite of proprietary data and analytics offerings designed to support private equity and M&A investors across strategy, sourcing, diligence, and post-acquisition value creation.
How does the SPS acquisition fit in with Bain & Company’s private equity offerings?
Over the past decade, Bain & Company has advised on half of all buyout transactions worldwide valued at more than $500 million. In more recent times, we have seen the firm expand upon its traditional consulting capabilities through acquisitions and partnerships with data and software providers. SPS represents a meaningful addition to Bain & Company’s product suite, allowing the firm to help its clients not only during deal due diligence, but also with their sourcing and origination engine. This activity highlights the increasing importance of market data and intelligence for private equity deals teams seeking to gain a competitive edge in an increasingly complex market. Other examples of Bain & Company’s meaningful activity in the space include:
Pyxis Acquisition
In December 2019, Bain & Company acquired Pyxis, a consumer behavior data & analytics provider. The acquisition helps private equity, institutional and corporate clients gain a more detailed and accurate picture of their own customers, their competitor’s customers and the clearest opportunities for growth, providing clients with a new dimension in due diligence and investment analysis.
DealEdge / CEPRES Partnership
In October 2020, Bain & Company and CEPRES, a private capital markets investment analytics & data solution, announced DealEdge, a digital advisory product that gives private equity investors unique insight into which deals have the most potential and where hidden opportunities exist to create value. In a previous article, we covered DealEdge while analyzing the nuances of private markets data. The DealEdge product allows Bain to provide larger private equity firms and GPs with a broad industry focus in particular with critical intelligence when assessing opportunities or evaluating existing portfolio investments. Firms engaging in secondary buyouts can also gain deeper insight into the prior owner’s relative success.
DealEdge produces deal-level financial benchmarks based on aggregated statistics, while SPS maintains its own transparent database of deals and the intermediaries involved in the process. It will be interesting to see if there are opportunities for elements of these two complementary products to integrate and add additional value to users in future.
What does the acquisition mean for private equity?
As the number of firms in the industry has grown, so too has competition for deals. As a result, forward-looking firms are seeking to adopt multiple sources of data and intelligence along with advanced analytics and workflow management tools in an effort to carve out a competitive advantage. However, with so many emerging providers launching innovative new products it represents a major challenge to both identify and assess the most compelling platforms. At PE Stack, we help fund managers and institutional investors understand the private equity software and data space, assisting with assessment and selection of solutions that best-align with key requirements and workflows.
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The private equity software and data space is vastly complex. The varying asset classes, fund structures and unique workflows of GPs and LPs allow many solutions to thrive, but also makes it harder to find the right fit. Through our comprehensive vendor profiles database and procurement service, we help private equity GPs and LPs understand the different solutions in the space and confidently assess them to find the best fit. If you’d like to learn more, please leave your details below and we’ll be in touch.