A PE firm usually buys when they think they see cost cutting opportunity.
Other times, they might recognize that a company needs capital to get bigger faster in order to address an expanding market. In this case, I think the thesis might be: cloud deployments and migrations are exploding; ThoughtWorks has the thought leaders; "roll up" other consulting firms into ThoughtWorks; dominate the market. A friend's consulting firm was just bought for this exact reason. Something very similar happened to Pivotal.
Consulting has notoriously low multiples and so if you couple a consulting business with a "computing/services" business you increase the multiple over night.
I expect this page to expand drastically over the years:
Disclosure: I work for Pivotal.
The original Pivotal Labs was founded in 1989. Rob Mee sold to EMC in 2012.
A little later (circa 2013), EMC and VMWare took a number of teams and assets (notably Labs, Cloud Foundry, Greenplum, Gemfire and Spring) and spun them out into a new company, which was called Pivotal.
Pivotal is basically three divisions: Labs, Cloud R&D, Data.
Pivotal Labs is the consulting wing, there is a lot of cultural and conceptual overlap with ThoughtWorks. The Labs division is the most recognisably direct descendant of the original company Rob Mee founded. Its offerings and work have broadened over time.
Cloud R&D is responsible for Cloud Foundry (including our commercial distribution PivotalCF), KuBo, Spring, Pivotal Tracker and I always forget something or someone.
Data is responsible for Greenplum and Gemfire and a number of related technologies (eg HAWQ).
It's a complicated history, because nearly every part of Pivotal has a history that predates Pivotal.
I agree they've been successful.
I meant firms like TPG, Blackstone, Silverlake, etc. I suppose they do sometimes stray from the model, but the rabid cost cutting is pretty typical.
the rabid cost cutting is pretty typical.
For example someone like Joel Spolsky could probably find a way to drive profits from the TW team and so maybe its a programmer that knows business behind the PE money.
https://www.joelonsoftware.com/2001/01/18/big-macs-vs-the-na...
They have an office in Bangalore, India too. Or had until a while ago - not checked recently.
TW can deliver well, but you have to manage them closely.
So closely you might as well just have hired a bunch of contractors and run the project yourself for a fraction of the price?
That's always been the case for large-scale consultancy: land a gig and keep it forever, or as long as it will last. It's the small ones who have an incentive to leave quickly, because they don't have the manpower to keep shackled to a single assignment for too long; but the big ones are body-shops, they have a virtually-infinite supply of fresh graduates to place - they will pull all the stops to keep the gig running as long possible.
That's what has me curious here. A PE firm usually buys when they think they see cost cutting opportunity. That may be hard to do with TW, since they pitch and price themselves as "premium".