Through a series of acquisitions in recent years, the IT consulting firm Valantic has experienced rapid growth. Back in 2018, the company employed 800 individuals. Today, its workforce has surged to over 3,000. The Valantic Group, founded in 2012, includes IT service providers, transformation consultants, and software specialists. After the purchases, the acquired companies retain a significant degree of autonomy. Matthias Uhrig, a partner at Valantic who leads the "Digital Strategy & Analytics" division, emphasizes the importance of decentralized responsibility within local management teams. He knows the transaction process from both perspectives: In 2018, he sold his own company, Intargia, to Valantic.

The extensive shopping spree has been made possible by Valantic's ownership structure. In early 2019, the investor Deutsche Private Equity (DPE) acquired a majority stake in Valantic, which had a turnover of €120 million at the time. In September 2022, DPE launched a follow-on fund ("continuation fund") of €708 million for Valantic and the Eraneos Group, which has been part of the portfolio since 2017. Valantic announced its intention to invest over €500 million by 2025, primarily in further M&A activities.

The funds from the continuation fund will primarily flow into further M&A activities. Uhrig believes that organic growth will come from these subsidiaries. According to him, most of the target companies have "significant double-digit revenues."

Valantic's most recent acquisition is Inspari. The company is based in Denmark and specializes in Microsoft technologies like Azure and Power Platform. They provide guidance to clients in making data-driven business decisions. In 2022, Inspari generated a revenue of approximately €25 million with 180 employees. The acquisition of Inspari is intended to pave the way for Valantic's entry into the Scandinavian market. Valantic has not disclosed the exact purchase price, but it is estimated to be in the mid-double-digit million range based on customary industry multiples for small-cap software companies.

The recent purchase aligned with the established M&A priorities: Valantic is focusing on acquiring technologies related to artificial intelligence, data, and cloud solutions. They aim to expand their competence in AI and data through these acquisitions. Uhrig points out that complementary acquisitions provide opportunities to create synergies with other group companies or fill gaps in their consulting services. "As we expand our service portfolio, opportunities for cross-selling arise." Compared to large software corporations, Valantic, which considers itself tool-agnostic, becomes more appealing as a partner with a broader portfolio. "We were already strong in the SAP environment, and now with Inspari, we are adding a focus on Microsoft," explains Uhrig.

Regionally, the growth focus is currently on Scandinavia, with the acquisition in Denmark being just the first step. "Inspari is meant to be a breeding ground for more," says Uhrig. "We consider Inspari as a gateway to the Nordic region."

How do you manage to avoid overwhelming the organization with this rapid pace of growth? "We have specialized onboarding teams that have grown with the organization in recent years," explains Uhrig. These teams include specialists from IT, marketing, and HR departments.

Valantic's scouting for interesting target companies is led by a Valantic M&A team in Munich. While they stay in touch with the DPE team, they operate independently during transactions. "We receive several hundred offers each year, and that's how we became aware of Inspari," Uhrig notes. Through its extensive history of acquisitions, Valantic has earned a reputation as an "entrepreneurial haven" among consulting firms looking to sell, he adds.

The key for the buyer is that the selling consultants don't view this as retirement. "The leadership teams and employees need to be a compatible match – and they must stay on board," highlights Uhrig. In the majority of cases, the strategy has proven to be successful: Over the past ten years, more than 90% of the founders, who brought their companies into the group, have stayed on board.

Valantic lately had secured the top position on the Lünendonk list of "Leading Medium-Sized IT Consulting Firms in Germany," with a total turnover of €413 million. This marks a 53% increase in revenue compared to 2021, driven by both organic and inorganic growth. It's worth noting that the Lünendonk list for mid-sized IT consultants sets a revenue cap of a maximum of 500 million euros, which Valantic is likely to exceed this year. Based on a like-for-like analysis, Valantic would have grown to around 540 million euros in the current fiscal year without Inspari. Now, the forecast is set for over 560 million euros, according to Uhrig. The number of employees is expected to reach approximately 4,000 by the end of 2023.

Matthias Uhrig, a partner at IT consulting firm Valantic, heads the "Digital Strategy & Analytics" division, which will also include the recent acquisition Inspari. As Managing Director, Uhrig is further responsible for the management consultancy firm Intargia, which he co-founded and which has been part of the Valantic Group since 2018.