IQNavigator (“IQN”), one of the world’s largest Vendor Management System (VMS) technology providers, has announced its plans to acquire ProcureStaff Technologies (“ProcureStaff”) and its VMS platform, ConsolVMS from Volt Information Sciences Inc. (Ticker: VISI). The acquisition represents the unification of two of the top ten VMS players in the contingent workforce management industry and will further the technology growth that IQN has blazed over the past five years.
The acquisition of ProcureStaff is a rare “shakeup” in a once volatile, but now stable, segment of the Contingent Workforce Management industry. This segment includes VMS players like Fieldglass, Beeline, Provade, and DCRWorkforce, which are all independent firms focused on delivering next-generation contingent workforce management capabilities to their customers and clients.
IQN’s acquisition is not expected to be completed until later in this quarter and terms of the deal were not disclosed to the public. IQN will continue to support the ConsolVMS platform while also offering current ProcureStaff clients an opportunity to migrate over to its platform.
Joe Juliano, CEO and president of IQNavigator told us yesterday that his team was very excited by this acquisition and the potential of the new company because of the combination of “IQN’s industry-leading VMS platform with ProcureStaff’s client and partner relationships, their history of strong client support, and the talents of the ProcureStaff team offer an unprecedented opportunity for existing clients and potential customers to get the best of both worlds on one seamless, scalable and global platform. We are very committed to expanding our model of global customer success and incorporating ProcureStaff’s best practices simply accelerates this path for us.”
Deal Background: As a longstanding provider with a trusted platform, ProcureStaff had been enjoying some recent success, in no small part due to the waves it made this past year by honing in one area that end-users were focused on improving to improve CWM programs: big data and business intelligence. ProcureStaff’s offering of a multifaceted, “agile” analytics package drove value for the users of the ConsolVMS solution including stakeholders in finance, IT, operations and sales.
Despite its recent success, ProcureStaff’s parent company, Volt, had a long-term focus that left the Consol business a distant third behind its two core businesses (staffing services and managed services programs). “Volt has and will be very focused on two core components of their organization: their staffing business and Managed Service Provider (MSP) arm,” said Carolyn Nolan, current COO of ProcureStaff in a briefing with Ardent Partners (Nolan expects to join the IQN executive team). “The dedication of both time and resources for the Consol platform just wasn’t there in the long term. It made sense for them to sell this part of their business to IQNavigator.”
To that, Jeffrey Varon, IQN’s EVP of Strategic Development, added “There were many key strengths within the ProcureStaff team that IQN found very attractive including organic and strategic growth, along with robust analytical and business intelligence client service capabilities, that played a direct role in why IQNavigator chose to make theacquisition,” said Varon. “For IQNavigator, their main strength has always been on the technology front. ProcureStaff Technologies will bring their award-winning client support expertise to the firm, as well. These attributes present a perfect synergy between the two organizations and bodes well for the future of IQN. It’s a very exciting time.”
Ardent’s Instant Analysis:
Simply put, the acquisition holds good promise for IQN as well as the customers of both companies, but especially the current users of the ConsolVMS solution. IQN is buying a customer base that should grow given greater attention and the opportunity to leverage a more dynamic platform. The marriage of two of the largest VMS players in the market should also deliver deal synergies and enable it to grow more rapidly than the average VMS provider (assuming it can leverage the complementary strengths of the two sides).
ProcureStaff’s customers, if they choose, can migrate to IQNavigator’s solution and be afforded with upgrades in many key areas, including or perhaps especially, the ability to manage the SOW-based and services workforce category (referred to as the “Complex Contingent Labor” Category in Ardent’s Contingent Workforce Management Framework), an area that is attracting a significant amount of attention in the market today (rightly so; it’s often the most difficult CWM category to manage). IQN’s premier SOW and services management solution is well -regarded and widely-deployed in the market so that current users of the Consol tool that migrate will immediately have access to these expanded capabilities. Companies migrating to the IQN solution may also benefit from the generally ambitious IQN product road map – GTCR, the private equity owners of the company, have committed significant dollars in recent years to research and development in the hope of leading the VMS solution market into the future. Consol’s customer base should be excited by the opportunity to migrate to a provider that puts a major emphasis on advancing its technology, particularly since they are in an industry that is constantly evolving. It is expected that many of Consol’s customers will make the move to IQNavigator in the near-term (company insiders indicate that at least 75% of the current ProcureStaff customers have or soon will agree to migrate).
That said, in the near-term, the ConsolVMS platform will be fully supported by IQN says Ron Kochman, President and Chief Executive Officer of Volt “A key part of this agreement is that IQNavigator will operate ProcureStaff’s VMS software so there will be no disruption to our existing customers.”
On its face, the acquisition presents many opportunities for IQN to deliver improved solutions and services to the market and thereby generate strong growth. Of course, the post-merger integration of technology acquisitions are almost never as easy or straightforward as they initially seem. We believe that the success of the deal will ultimately hinge on IQN’s ability to successfully (1) retain and then migrate ProcureStaff customers to its platform, (2) keep key ProcureStaff staffers, and (3) leverage the strength of the ConsolVMS analytics package into a future IQN release. We’ll be watching.
Stay tuned for more analysis on this acquisition and (once the deal closes) for our ongoing coverage of IQN and the VMS market.
Andrew Bartolini co-authored this article. All companies mentioned in this article are clients of Ardent Partners, the publisher of this website. Neither author holds any financial interest in any company mentioned in the article.
RELATED ARTICLES
Contingent Workforce Management Technology: Market Update, Q4 2013
Next Generation of CWM Technology, Part I: The VMS of the Future
Mobility and Complex Category Management (Part I)
The Future of Contingent Workforce Management: Where Can We Go?
