So with Bain, McKinsey and even now BCG (I’m hearing) vying to acquire ZS, what are the implications for us as ZSers? Top of the food chaining I’m thinking...

likefunnyuplifting
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This isn’t going to happen. Beyond the “our partners would never sell” mantra, none of those shops could afford the acquisition without taking on significant risk to their balance sheets. Assume ZS goes for roughly what PWC acquired Booz for - it might be a stretch, but given ZSs historical revenue growth, it’s not clear why partners would take less than $1BN just to acquire and then who knows how much to actually integrate. McKinsey is the biggest of the 3 and they’re estimated to be $10Bn in annual revenue. But, this year in particular, that revenue has a 5% haircut because of the opioid settlement. PWC is more than 4x bigger than McKinsey in revenue. A bit hard to see how they could afford this, and if they can’t, BCG and Bain surely can’t. Sure, they could try to finance with debt...but why? Neither MBB nor ZS have significant assets to collateralize a loan, so rates would presumably be pretty high. So then it’s a question of comparing where else growth could come from. Presumably, much smaller shops could generate smaller growth but not require debt and there’s always old fashioned organic growth. Lastly, Booz presumably sold because they had no vision for how to maintain their growth...but the same isn’t true for ZS. We obviously have a ton of industries we could go after and we’re not even “complete” in healthcare yet. That clear growth story would presumably put a premium relative to Booz that makes this even more out of reach.

likesmart

Wait - who asked for a reality check? Aren’t we also saying that the acquisition / merger doesn’t make sense? Sounds like we agree that whatever offer y’all think is “standard” won’t be enough for what we know as our growth and financial potential. We don’t spend our time trying to be a viable acquisition target for MBB. Thanks all for some healthy perspective on the MBB complex that exists in this bowl!

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For the love of all things holy, if ZS gets acquired by any of these companies I am out. Part of why I am here is I love the culture, I love the people, and I like not being a slave to the road and having a great work life balance (trust me to the ZSers reading this, you have no idea how good you have it).

likeuplifting

One of the companies listed here (and others). All they are all great companies, don’t get me wrong - just not for me. And yes we work hard at ZS. But there is a great ability to draw personal boundaries with work, very little travel for most, and a really great culture with the ability to make your own path. I grew up in consulting and would never leave ZS to go to another consulting company.

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What is ZS?

funnylike

You’re wrong. ZS is buying all 3 MBB

likefunny

This is the way

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My ZS colleague here is apparently drunk.

likefunny

If we got acquired our culture would be gone. We would have to fit in theirs. I’m not down for that. I’d rather leave.

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I’ve heard that Scarlett Johansson, Margot Robbie, and Gigi Hadid are looking to acquire me as a boyfriend. You’ll have to trust my sources on this.

likefunny

Hey OP, you’re embarrassing us

likefunny

niiiiice

Just because firms are doing diligence doesn’t mean they are actually going to do the deal. We diligence a lot of firms and mostly it’s smarter just to pick off the best partners vs buying the firm.

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Either that or boutiques that take PE money to cash out, grow and consolidate. But yeah... our revenue and margin trends are whatever the opposite of distressed is these days.

likeuplifting

Where are you getting this? I don’t think Bain would buy a company like ZS since it’s quite large relative to Bain (like 1/2 the FTEs of Bain) and Bain would struggle to maintain / enforce culture and op model. Plus, there’s a huge ASP difference between the firms (and thus compensation into management and partnership). But who knows. They obviously don’t invite me to these convos even if they’re happening

likefunny

It’s weird to see ZS punching so far outside of their pay grade. This kind of “greater chance that an asteroid will hit the earth” fever dream is typically Deloitte’s game.

likefunny

We are happy with our firm being independent and have no intention of being acquired at any price tag by any of mbb or big4s! You can very well keep your superiority complex if that helps you. 😀 And yes that's in our blood - always punch above your weight and knock'em down!

Yeah and KPMG is buying McKinsey.

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That’s McKPMG to you

funnylikehelpful

The life sciences expertise would be a massive boon to whomever made the move - for ZSers access to new non-life sciences verticals would be pretty cool

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Run- ZS is a sinking ship

likefunny

Not to be a jerk, but I probably wouldn’t trust the judgment of other firms from someone who actively chose KPMG.

likehelpfulfunny

I’m buying zs with dogecoin gains

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When I was at Deloitte there was talk of Accenture buying Bain. Then we were taking an outside in look at buying Bain. Then we were trying to figure out how we were positioned versus Accenture post Bain acquisition. I guarantee the other Big4 started looking at Bain because we all do the same crap. And you know what happened? Nobody bought Bain. I suspect the ZS "acquisition" will be like the Bain "acquisition".

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Then leadership at Deloitte has eaten the onion. This has always been a meme. Anyone who knows anything knows that the 90s restructuring made selling Bain a tall task.. I think y’all been hoodwinked by some rumors.

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McKinsey wouldn’t acquire ZS

smart

Thank goodness!

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Lol is this real?

No it’s not

funnylike

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