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By | Kelly Fiveash 12th April 2007 09:02

Hitachi Consulting acquires Impact Plus

Plans for growth in European market

Hitachi Consulting has expanded its reach into the European services and solutions market with the acquisition of UK-based IT consulting firm Impact Plus.

The consulting arm of electrical manufacturing giant Hitachi announced yesterday that it had closed the deal with Impact Plus on 2 April after nine months of discussions. It is the firm's first acquisition in Europe.

Jim Schuchard, European managing vice president at Hitachi Consulting told The Register: "We actually sought out Impact Plus almost a year ago, we had always envisioned an acquisition in the UK; our focus has been financial services and public sector.

"We thought about different opportunities in the market and we really felt like Impact Plus was a very good fit."

When asked if Hitachi's plans to close down its Mexican hard drive plant - which could reduce its global workforce by up to 11 per cent - had any strategic significance given the firm's expansion in the European consulting market, Schuchard said: "I think in general you will see that more and more of Hitachi's capital expenditures will be in the services and solutions space."

Co-founder and joint managing director of Impact Plus, David Bailey, told The Reg: "What we were looking for was the ability to break through to the next level, primarily in terms of credibility to go for larger deals, and what we didn't have was either the brand strength or financial clout to be able do that. When Hitachi came knocking on our door, they've obviously got both of those."

Bailey added that all staff, including the Hitachi Consulting London team, would be based in Impact Plus's Teddington office. "Everybody will maintain his or her job, with one exception, my co-founder, Andy Miller," he said.

Miller had decided to retire before the Hitachi deal was struck and in an official statement said his plan "was no surprise to our staff", signalling that his decision to leave was unrelated to the acquisition.

Hitachi Consulting was established in 2000 and has watched its business grow to $250m with around 1250 consultants based in the US.

It entered the European market in March 2006 and opened a number of practices in the UK, Spain, Portugal and Germany, and currently has around 120 staff in the region.

Impact Plus was established in the UK in 1990 and has around 60 staff and an annual revenue turnover of £10m.

Hitachi Consulting wants to expand the number of consultants in Europe to around 500 by the end of 2010 and, hot on the heels of the deal, Schuchard said the firm has "made a decision to go recruiting immediately".

It aims to strengthen its market position in Europe and hopes to make one acquisition a year, he said. ®

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