MSD Partners buys 50% of West Monroe
Investment firm MSD Partners has made a strategic investment in management and technology consultancy West Monroe, taking a 50% stake in the company.
The deal values West Monroe at $2.5 billion, according to anonymous tipsters cited by Bloomberg.
The Chicago-based consultancy’s management team, including chairman and CEO Kevin McCarty, will remain in their roles. The company will now by governed by a 50/50 split of representatives from MSD and the employee-owners of West Monroe.
MSD Partners was founded in 2009 by the partners of MSD Capital, the family investment office of Michael Dell. The firm makes investments in the areas of credit, real estate, private capital, and growth.
The capital investment will help West Monroe accelerate its digital consulting pivot, and specifically its plans to build a global product development platform. West Monroe made its first move in building the new platform with last month’s acquisition of Verys, a California-based digital product engineering firm with more than 220 employees.
The investment will also help West Monroe expand internationally. The firm currently has 2,000 people across eight US offices. West Monroe is projecting $550 million in revenues for 2021 and wants to be a $1 billion company by 2025.
McCarty told Bloomberg that the consultancy is planning to open a London office in Q1 2022, and is also examining M&A targets for growth in that market.
“This is the right time for West Monroe to take on a strategic investment from an investor who shares our long-term view on growth and client service,” McCarty said in a press release. “This investment will give us enhanced financial capabilities to fuel the next phase of West Monroe’s growth, as well as an investment partner with a long-term perspective and significant digital technology expertise.”
John Civantos, co-head of MSD Partners’ private capital group, said, “We’re excited to partner with West Monroe in their next chapter and share their commitment to capturing the significant opportunities that lie ahead.”
Following the MSD deal, West Monroe says all company employees will have an opportunity to invest in and own part of the remaining half of the firm.
