Navigant Heeds Deal Advice of Its Own Pros: The business services heavyweight is cued by its practice chiefs in bulking up and adding skills

The best acquisition opportunities pursued by Navigant Consulting Inc. have been “home grown,” says Jeffrey Stoecklein, corporate development VP at the specialized business advisory firm. Navigant has rolled up nearly 20 acquisitions over the last four years – most recently, corporate finance maven Casas, Benjamin & White in early February – and almost every completed deal has been “identified and championed by our practice leaders throughout the business.” Chicago-based Navigant provides businesses with a wide range of targeted advice and services including litigation support, regulatory consulting, due diligence and investigative work, and valuations. As a talent-centric organization, it is choosey about the abilities of the people it takes on through either recruitment or acquisition and figures its professionals give it an edge in the initial vetting of potential targets. “The men and women out in the field know who the good companies are because they run up against them,” Stoecklein says. “It’s the same way with recruiting people into the company. They know who the good professionals are.” Ideas generated from the line, Stoecklein adds, “are by far the closest fit to where we want to go strategically.” “When they put together their strategic plans before the beginning of every year, they are trying to figure out where to fill gaps in skill sets and things like that. It’s really done in terms of building out practices based on opportunities in the marketplace.” Likely targets surfaced by Navigant pros may be competitors or firms offering complementary services with the ultimate goal of building scale where needed and enhancing prospects for cross-selling services, notes Navigant CFO Ben Perks. He points out that acquisitions accounted for about half the 600 pros added to the ranks in 2004. “We see individuals from a competitive perspective and we sometimes have worked with these practitioners,” he says. “We look at it as vertical integration in terms of skill sets we can use in vertically going down or vertically going up.” Casas, Benjamin & White, bought by Navigant for $47.5 million in cash and stock, helps build up the acquirer’s corporate finance practice with its strengths in bankruptcy reorganization and m&a due diligence work. The acquisition followed three deals in 2004, including litigation and business consultant Tucker Alan Inc., financial services adviser Capital Advisory Services, and health care expert Invalesco Group, which cost more than $100 million combined. Despite differences in expertise, these firms share a key characteristic – they are simpatico with the Navigant’s culture. Although he eyeballs such obvious hallmarks as financial performance, quality of skills, and customer loyalty, Stoecklein says he looks first at the candidate’s “cultural fit and philosophy.” “I think that has to be right or it’s a non-starter,” he notes. “We are a public company but we have a sort of partnership mentality,” Stoecklein adds in describing the culture. “All companies are integrated and working together.” Stoecklein and Perks expect the Navigant approach to get a good workout in the future, since the consulting industry is highly fragmented, and they are requiring their consultants to be bigger outfits offering wider ranges of services. Emblematic of the trends, Perks says, Navigant had 79 engagements worth $1 million or more last year compared with 40 in 2002. “We have the scale to take on the biggest assignments and we’re pretty well positioned that way, as opposed to smaller shops that really can’t offer that comprehensive service,” Stoecklein says. Copyright 2005 Thomson Media Inc. All Rights Reserved. http://www.thomsonmedia.com http://www.majournal.com