New York, NY – After a protracted, and often painful auction process, Standard & Poor’s finally sold its Vista Research expert network business to competitor Guidepoint Global Advisors (formally called Clinical Advisors). While official details of the deal were not disclosed, industry insiders suggest the firm was sold for between $10 million and $13 million – considerably less than the purported $40 million that S&P bought the business for in 2005.
Apparently, a number of suitors have looked at Vista Research in the past twelve months, including a number of Wall Street investment banks, brokerage firms, other expert network providers, research firms, and even some industry outsiders. However, most parties were scared away, either by the asking price, the market environment, or the firm’s deteriorating conditions. Fortunately, Guidepoint saw an opportunity to acquire an international presence and propel itself into the number two spot in the industry at the same time by purchasing the wilting Vista franchise.
Troubles for Vista
Over the last few years, Vista has been able to survive a number of troubling developments. In 2007, the New York State Attorney General initiated an investigation into Vista and Gerson Lehrman and questioned the firms’ compliance practices. Both Vista and Gerson responded to these issues by spending millions to shore up their compliance systems and practices. However, Standard & Poor’s risk averse culture forced Vista Research to reign in the marketing of its services (and to restrict how it marketed its compliance efforts).
In another 2007 article posted in this space, we reported on one of these troubling developments at Vista: Stanton Green, Vista’s CEO at the time, left the firm to join channel check firm OTR. Once Mr. Green left, a large number of key sales professionals also parted ways with the firm.
Since then, Vista Research slid from being the second largest player in the expert network space (next to Gerson Lehrman) with close to $22 million in sales, to occupy a mediocre fourth place today. Gerson Lehrman, Coleman Research, and GuidePoint Global are currently all larger than Vista Research.
Upstart competitors like Coleman and GuidePoint, however, have been implementing aggressive marketing strategies that have resulted in sharp gains in revenue. So, while Vista – under S&P’s wing – kept conservative strategies of marketing and product development, its competitors were (and are) racing to gain share in the expert network space.
Background of the Deal
Founded in 2001, Vista Research was acquired by Standard & Poor’s in April, 2005. This acquisition initially provided Vista the benefits associated with belonging to a large global platform. In fact, the firm grew its sales for the first two years after the purchase. However, after the Attorney General’s probe, S&P held the firm back from taking more aggressive measures to market their products.
GuidePoint Global, the acquiring company, was founded in 2003 as an expert network in the healthcare space. It has since expanded its coverage and is now one of the main US players in the expert network space. Nevertheless, we think GuidePoint will benefit from Vista’s presence, which S&P worked hard to expand. Furthermore, Vista could act as a good complement for the acquiring company’s current offerings, since Vista has traditionally been well known for its offering in industries such as technology and telecom, among others.
The Future is Full of Questions
Many questions arise now that a larger player has emerged in the independent research space. Questions surrounding the merger itself: Layoffs? Overlapping products? Revenue adjustments from clients who use both firms? Will existing clients like the new merged entity? Will new clients be attracted to the offering? And other questions regarding the expert network space in general: How will the competitors react? How will this new firm position itself among its competitors? Will this acquisition have any effect on the undisputed leader in the expert network space – Gerson Lehrman Group?
We will see…
The following is the full text of the Press Release published by Guidepoint.
LEADING PRIMARY RESEARCH FIRM GUIDEPOINT GLOBAL
ANNOUNCES ACQUISITION OF VISTA RESEARCH
New York, NY, May 21, 2009 – Guidepoint Global, LLC, a leading primary research firm, today announced the acquisition of Vista Research, Inc. from Standard & Poor’s. Guidepoint provides one of the world’s largest networks of industry experts to investors and business decision makers. Standard & Poor’s is a division of The McGraw-Hill Companies. Terms of the transaction were not disclosed.
The strategic combination of over 130,000 global experts creates one of the largest industry networks in the world, strengthening Guidepoint’s leadership in the expert network field and building on its healthcare expertise with Vista’s depth and breadth in Technology, Media, Telecommunications, Energy, Industrials, Retail, Financial Services, and Leisure and Gaming sectors. Additionally, the complementary union provides clients with a global reach through offices and dedicated recruiters in the United States, Europe and Asia. With the acquisition of Vista Research, Guidepoint Global will expand its team of client service professionals and recruiters to support a client base that includes many of the world’s leading private equity firms, mutual funds, hedge funds, strategy consultancies and multinational companies.
“In the current economic climate, investors and business decision makers are increasingly seeking on-demand knowledge and insights through expert networks,” said Albert Sebag, CEO of Guidepoint Global. “Guidepoint’s acquisition of Vista, a pioneer in the expert network field, gives our clients access to one of the most comprehensive primary research networks in the world, delivered with the single-minded focus on customized service that they have come to expect.”
Guidepoint’s enhanced global database of experts will provide phone consultations, face-to-face meetings, custom surveys, proprietary data tracking products, and events hosted by experts. The company boasts an industry-leading compliance framework supported by a proprietary IT platform, as well as one of the most advanced online client interfaces. Terms of the transaction were not disclosed.
About Guidepoint Global, LLC
Guidepoint Global is a leading primary research firm founded in 2003 providing customized information solutions in the Healthcare, Technology, Media, Telecommunications, Energy, Industrials, Consumer Goods & Services, and Financial Services sectors. Clients include some of the world’s leading private equity firms, mutual funds, hedge funds, strategy consultancies and multinational companies. Through phone consultations, face-to-face meetings, custom surveys, and proprietary data products, coupled with an industry-leading compliance platform, Guidepoint provides its clients with the insight required to make informed decisions.
About Vista Research, Inc.
Founded in 2001, Vista Research, Inc. is a pioneer in the expert network field supporting institutional money managers, corporations and legal and consulting firms. Vista Research provides its clients with an efficient and unique opportunity to gain direct insight into a particular company or industry by connecting its clients with members of the Society of Industry Leaders, a global network of leading experts and prominent industry professionals.
Contact Information for Guidepoint Global:
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