The acquisition looks to create a global research and advisory company focusing on all major functions in an enterprise.
Technology research company Gartner will be acquiring CEB, a business research and analysis company, for $2.6bn.
In a move designed to expand the company’s global reach, Gartner will acquire all CBE shares in cash and stock. It will assume CEB’s debt of $700m, increasing the transaction value to $3.3bn. As per the acquisition agreement, Gartner will pay $54 in cash and 0.2284 shares of Gartner for each of CEB’s common share. The transaction will comprise 70% cash and 30% in stock.
After the transaction is completed, Gartner’s shareholders will own 91% of the combined company’s interest, while CEB shareholders will own 9% of the remaining interest.
The boards of directors of the two companies have given their approval and the acquisition is expected to be completed by the end of first half of 2017.
The transaction will be funded by Gartner’s own cash reserves along with its credit facility and an additional debt financing.
With this acquisition, Gartner can expand its capability to help its customers take right decisions. Its syndicated research and advisory services in information technology (IT), marketing and supply chain can now be enhanced with CEB’s best practices and talent management insights across several business functions including human resources (HR), sales, finance and legal.
Gartner said that it can now provide a spectrum of services, virtually across all business functions in every industry.
As of September ending last year, the two companies’ combined revenue was about $3.3bn, with $693m in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA).
The two companies employ more than 13,000 people with clients in more than 100 countries.
Gartner CEO Gene Hall said: “We are excited about joining forces with CEB, a world-class company we have long admired. Our highly complementary business models will create the leading global research and advisory company for all major functions in the enterprise.
“We look forward to working with CEB’s highly talented teams to leverage our global reach and apply Gartner’s proven operational and sales execution capabilities at scale to accelerate growth across CEB’s businesses.
“We will also introduce Gartner’s existing syndicated research and advisory services to CEB’s clients in a broad range of functional areas that extend beyond our existing IT, Marketing and Supply Chain roles.
“Similarly, we will introduce CEB’s best practice and talent management insights to Gartner clients worldwide.”
CEB chairman and CEO Tom Monahan said: “We have long admired Gartner for its impact on clients and track record of growth. We’re pleased to reach this agreement, which offers compelling benefits to CEB shareholders, clients and employees.
“CEB shareholders will receive substantial and immediate value for their investment while benefitting from the upside and strong growth prospects of the combined company. The combined company will have unmatched insight into technology, talent and the other drivers of corporate performance.
“It will also have deep reach into a massive, immediately addressable market with clear need for our support across a range of functional areas. CEB employees will benefit from being part of a diversified and growing global organization with enhanced opportunities for career growth and development.”
According to Gartner, the acquisition can help CEB grow by leveraging Gartner’s practices and global scale.
Gartner plans to introduce CEB’s existing best practices and talent management to mid-size enterprise segment, due to its extensive market presence. In addition, Gartner also plans to develop a suite of new syndicated research and advisory products by using CEB’s strength in Human Resources, Sales, Finance and Legal.