Resources Connection to Acquire Reference Point LLC
- Acquisition of Reference Point to strengthen RGP's consulting offerings in the financial services sector.
- Expected growth acceleration for RGP's financial services and overall consulting business.
- Alignment of cultural values and synergies between Reference Point and RGP.
- Enhancement of advisory solutions and on-demand talent services for clients.
- Transaction led by Managing Partner Scott Goeden, with the current management team to continue post-closing.
- Anticipated closing by early summer 2024, subject to customary conditions.
- None.
Insights
The acquisition of Reference Point by Resources Connection, Inc. (RGP) represents a strategic move to strengthen RGP's presence in the financial services consulting sector. This sector is a significant contributor to the U.S. management consulting spend and the deal could position RGP to capture a larger market share. The integration of Reference Point's specialized services, such as risk and regulatory compliance, could offer RGP a competitive edge by broadening its advisory capabilities.
From a mergers and acquisitions perspective, the transaction seems to be a complementary fit. Reference Point's focus on strategy, management and technology consulting is aligned with RGP's existing services. The cultural and operational synergies mentioned by the CEO indicate potential for a smooth integration process, which is often a critical factor in the success of such deals.
However, the success of the acquisition will largely depend on the post-merger integration. The ability of RGP to effectively incorporate Reference Point's offerings and leverage its on-demand talent model will be key to realizing the anticipated growth acceleration. It is also important to monitor how the existing clients of Reference Point respond to the acquisition, as client retention will be important for the projected growth.
Reference Point's acquisition by RGP underscores the growing trend of consolidation within the financial services consulting industry. By focusing on areas such as digital & technology and data & analytics, RGP is tapping into the increasing demand for technological expertise in the financial sector. The move could enable RGP to offer more comprehensive solutions to its clients, addressing the complex regulatory environment and the need for digital transformation.
For stakeholders, the potential expansion of RGP's project execution capabilities and the enhancement of its on-demand talent services could translate into increased operational efficiency and client satisfaction. However, it is essential to consider the potential risks associated with the integration of technology platforms and the harmonization of consulting methodologies.
In the long term, the acquisition could provide RGP with a stronger foothold in the financial services industry, but it will be important to track how effectively RGP integrates Reference Point's expertise and whether it can maintain the high standards of service that clients of both firms expect.
The strategic acquisition of Reference Point by RGP is likely to have an impact on the market dynamics of the consulting industry. RGP's move to acquire a firm with a strong foothold in the financial services sector is indicative of the company's intent to diversify and enhance its service offerings. The emphasis on digital & technology and data & analytics capabilities is particularly relevant, given the increasing importance of these areas in the consulting industry.
Market trends suggest that clients are seeking end-to-end solutions that can tackle the specific challenges of the financial services industry. RGP's acquisition could meet this demand by providing a more integrated approach to consulting. For investors and market observers, it will be important to track the performance of this acquisition through key metrics such as client acquisition rates, cross-selling success and the impact on RGP's overall revenue growth.
While the acquisition holds promise, it is also important to remain vigilant about the challenges of integrating different corporate cultures and service models. The ability of RGP to retain the talent and expertise of Reference Point will be a determining factor in the overall success of the transaction.
Transaction will expand RGP’s consulting capabilities in the financial services sector
Led by Managing Partner Scott Goeden, Reference Point employs a differentiated consulting delivery model where engagements are led by former industry executives supported by top-tier consultants. Focused exclusively on the financial services sector, the firm provides end-to-end solutions for clients, from strategy development to implementation to management. Reference Point was established in 2002 by former banking executives aiming to help clients manage complex operational challenges unique to the financial services industry. Headquartered in
“Reference Point delivers an impressive array of advisory offerings, and we expect their team’s deep industry acumen to greatly benefit our clients,” said Kate Duchene, CEO of RGP. “The financial services industry constitutes one of the largest shares of
This transaction, upon closing, will expand the portfolio of high-value advisory services RGP offers its financial services clients, and in turn, is expected to accelerate the growth of the firm’s financial services and overall consulting business. It is further expected that the business combination will extend RGP’s project execution and on-demand talent services to Reference Point’s enterprise clients, while also fueling meaningful growth acceleration for the Reference Point business through its access to RGP’s client base and differentiated on-demand talent model. The current Reference Point management team, led by Mr. Goeden, will continue to lead the business following the close of the transaction.
“We look forward to joining forces with RGP to expand the breadth of our offerings to existing clients and better serve clients across the global financial services sector through our collective consulting capabilities,” said Mr. Goeden, Managing Partner of Reference Point. “RGP aligns with our industry and digital capabilities as well as our expert-led execution model, and our organizations share the same values that anchor everything we do.”
The transaction is expected to close by early summer 2024 and is subject to customary closing conditions. Clearsight Advisors, Inc. served as exclusive financial advisor to Reference Point in connection with the transaction.
ABOUT RGP
Named among Forbes’ World’s Best Management Consulting Firms for 2023, RGP is a global consulting firm focused on project execution services that power clients’ operational needs and change initiatives utilizing on-demand, expert and diverse talent. As a next-generation human capital partner for our clients, we specialize in co-delivery of enterprise initiatives typically precipitated by business transformation, strategic transactions or regulatory change. Our engagements are designed to leverage human connection and collaboration to deliver practical solutions and more impactful results that power our clients’, consultants’ and partners’ success.
We attract top-caliber professionals with in-demand skill sets who seek a workplace environment characterized by choice and control, collaboration and human connection. The trends in today’s marketplace favor flexibility and agility as businesses confront transformation pressures and skilled labor shortages even in the face of macroeconomic contraction. Our client engagement and talent delivery model offers speed and agility, strongly positioning us to help our clients transform their businesses and workplaces, especially at a time where cost reduction initiatives drive an enhanced reliance on a flexible workforce to execute transformational projects.
We have approximately 3,600 professionals collectively engaged with over 1,800 clients around the world from 38 physical practice offices and multiple virtual offices. Headquartered in
RGP is listed on the Nasdaq Global Select Market, the exchange’s highest tier by listing standards. To learn more about RGP, visit: http://www.rgp.com. (RGP-F)
ABOUT REFERENCE POINT
Reference Point is a strategy, management, and technology consulting firm focused on delivering impactful solutions for financial services clients. We combine proven experience and practical expertise in a unique consulting delivery model where our engagements are led by former industry executives supported by top-tier consultants, ensuring our clients receive superior quality and value.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to expectations concerning matters that are not historical facts. Such forward-looking statements may be identified by words such as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “remain,” “should” or “will” or the negative of these terms or other comparable terminology. In this press release, such statements include statements regarding our growth and operational plans, the expected extension of our project execution and on-demand talent services to Reference Point’s enterprise clients, and the accelerated growth of the Reference Point business through access to our client base and differentiated agile talent model, and the expected benefits of the Reference Point acquisition to our clients. These statements and all phases of RGP and Reference Point’s operations are subject to known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievements and those of our industry to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties include, but are not limited to, the following: risks related to an economic downturn or deterioration of general macroeconomic conditions, the highly competitive nature of the market for professional services, risks related to the loss of a significant number of our consultants, or an inability to attract and retain new consultants, the possible impact on our business from the loss of the services of one or more key members of our senior management, risks related to potential significant increases in wages or payroll-related costs, our ability to secure new projects from clients, our ability to achieve or maintain a suitable pay/bill ratio, our ability to compete effectively in the competitive bidding process, risks related to unfavorable provisions in our contracts which may permit our clients to, among other things, terminate the contracts partially or completely at any time prior to completion, potential adverse effects to our and our clients’ liquidity and financial performances from bank failures or other events affecting financial institutions, our ability to close the Reference Point transaction and to realize the benefits anticipated therefrom, risks that our recent digital expansion and technology transformation efforts may not be successful, our ability to build an efficient support structure as our business continues to grow and transform, our ability to grow our business, manage our growth or sustain our current business, our ability to serve clients internationally, additional operational challenges from our international activities including due to social, political, regulatory, legal and economic risks in the countries and regions in which we operate, possible disruption of our business from our past and future acquisitions, our potential inability to adequately protect our intellectual property rights, risks that our computer hardware and software and telecommunications systems are damaged, breached or interrupted, risks related to the failure to comply with data privacy laws and regulations and the adverse effect it may have on our reputation, results of operations or financial condition, our ability to comply with governmental, regulatory and legal requirements and company policies, the possible legal liability for damages resulting from the performance of projects by our consultants or for our clients’ mistreatment of our personnel, risks arising from changes in applicable tax laws or adverse results in tax audits or interpretations, the possible adverse effect on our business model from the reclassification of our independent contractors by foreign tax and regulatory authorities, the operating and financial restrictions from our credit facility, risks related to the variable rate of interest in our credit facility, the possibility that we are unable to or elect not to pay our quarterly dividend payment, and other factors and uncertainties as are identified in our most recent Annual Report on Form 10-K for the year ended May 27, 2023, filed on July 25, 2023, and our other public filings made with the Securities and Exchange Commission. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business or operating results. Readers are cautioned not to place undue reliance on the forward-looking statements included herein, which speak only as of the date of this press release. RGP does not intend, and undertakes no obligation, to update the forward-looking statements in this press release to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, unless required by law to do so.
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RGP Investor Contact:
Jenn Ryu, Chief Financial Officer
(US+) 1-714-430-6500
jennifer.ryu@rgp.com
RGP Media Contact:
Pat Burek
Financial Profiles
(US+) 1-310-622-8244
pburek@finprofiles.com
Source: Resources Connection, Inc.
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