St. Louis-based Perficient has acquired BioPharm Systems for $17.6 million, the company said Tuesday, bolstering its health-care business by breaking it into the life sciences and pharmaceutical technology consulting verticals.
The acquisition is the company's second so far this year, after it purchased ForwardThink Group, a financial technology consulting firm, for $46 million. The company is currently ranked No. 79 on CRN's 2013 SP500 list.
The latest acquisition of San Mateo, Calif.-based BioPharm Systems, though in a different industry, follows the company's strategy to fill voids in solutions and find complementary industries to current core offerings, Perficient CEO Jeff Davis said.
"We've been very acquisitive over the years," Davis said. "These last couple of years we've really stepped up the game and managed to get some strategic deals done."
BioPharm Systems will be integrated into the company under Perficient's health-care umbrella, making up the company's life sciences and pharmaceutical section. Along with its vertical expertise, the acquisition also brings an additional 50 consulting, technology, sales and support professionals. BioPharm CEO Alex Sefanov will get a key leadership role within Perficient.
While Perficient didn't have much of a presence in life sciences and pharmaceuticals before, Davis said that the new industries tie into Perficient's robust health-care division, which accounts for roughly 25 percent of the company's revenue. BioPharm Systems, in particular, has a very successful business in that niche industry, Davis said, with an average $220-per-hour bill rate, $80 per hour more than Perficient's average U.S. rate.
"I see this as a foot in the door into an industry that has a tremendous IT spin," Davis said.
While many companies are specializing in specific verticals, Davis said that it has been working well for Perficient to develop its verticals but also to drive growth across multiple industry verticals.
"It's worked really well for us. We have been verticalizing the business more and more now. But we're at a size that we can have it both ways," Davis said. "I think we're at the size where we can manage it all."
Having that breadth helps Perficient compete better in the Fortune 1000 company market against big solution provider companies, such as Accenture and Cognizant, Davis said. While Perficient wasn't always aiming at Fortune 1000 companies, it has been working to push more into that market after emerging from the recession. Right now, 70 percent to 75 percent of the company's revenue is coming from Fortune 1000 companies.
"Our strategy is to maintain that depth, that niche capability, that frankly I think those big guys have lost," Davis said. "I think they opened up a void for us that we've stepped into. We want to have a broad enough portfolio that once we establish that relationship with that Fortune 1000 customer, we have a lot to offer them."
The growth for Perficient in that market has been significant, Davis said. In the past four years, the company has almost doubled the size of accounts with its top 50 relationships. For the top 50 accounts, the company averaged $3.5 million, up from $1.9 million in 2010.
A huge chunk of that growth is coming from health care, Davis said, which is why the BioPharm acquisition is so crucial to the company's growth.
"Our goal ... is to exit this year at a $500 million run-rate, and I think we've got a really good shot at it," Davis said. The company is currently at an approximately $450 million run-rate with the latest acquisitions included.
Davis said to expect more acquisitions and organic growth to help achieve that revenue goal. He said that the company will be particularly focused on technology consulting firms focusing in energy, gas, utilities and retail.
"That’s kind of our next area of investment," Davis said.
PUBLISHED APRIL 1, 2014