Global management consulting and technology services firm, Accenture has found a buyer for its venture capital business, Accenture Technology Ventures. Following its decision in March to put its venture portfolio up for sale and cease all venture capital investing Accenture has reached an agreement with CIBC World Markets, the investment and merchant banking arm of Toronto-based financial services company CIBC. Terms of the transaction were not disclosed.
Accenture decided to sell all of its investment portfolio to reduce volatility in future earnings following preliminary second quarter results, which revealed net income before minority interest, excluding write-downs, at around $240 million. Including the write-downs, the figure fell to between $23 million and $33 million. The firm said it would record a $212 million charge in the second quarter for the repositioning of its venture see evcj April, page 27. Accenture does not expect to take any additional charges against earnings in connection with the transaction, which is expected to close by the end of this calendar year.
Accenture will retain a five per cent stake in the portfolio, which comprises around 80 early- and mid-stage technology companies primarily in the software sector. The firm will continue its existing alliances and client relationships with companies in the portfolio. In addition, Accenture and CIBC World Markets will enter into an agreement to provide CIBC World Markets with access to Accenture’s expertise and knowledge of the technology sector.
Roxanne Taylor at Accenture commented on the sale: “We decided to sell a majority interest in our venture and investment portfolio to minimize future earnings volatility. However, we remain committed to identifying and leveraging new technologies and technology companies for the benefit of Accenture and our clients. Retaining a modest interest in the portfolio enables us to meet both of these objectives.”
Accenture Technology Ventures has European offices in London, Dusseldorf and Stockholm. When Accenture formed Accenture Technology Ventures in 1999 it had allocated some $1 billion to be invested over five years, but the amount invested was significantly less in a modest portfolio of investments.