Back in 2018 I wrote about changes in the EHS space and how it might affect EHS Managers and Directors. Back then, I concluded the article with, “I am notoriously bad at predictions – be they political, economic or other. I do not know where the EHS Market is headed, but it is clearly ripe for change and likely moving towards further consolidation.”
Though I do not claim better predictions today, it is clear the M&A trend has continued. Just some of the items of note are:
- Nimonik acquired MediaLogic inc. for an undisclosed amount (PR)
- Bloomberg shutdown the majority of the environmental service offerings under Bloomberg BNA, which had been an acquisition a few years prior.
- Echoline was acquired by Karnov in 2021 for an amount near 2.8 M Euros
- Pegasus/Antaris (Ireland) was acquired by Red-On-Line (owned by InfoPro) in 2021 for an undisclosed amount (PR)
- Gutwinsky was acquired by Red-On-Line (owned by InfoPro) in 2021 for an undisclosed amount (PR)
- Regscan was acquired by ENHESA for an undisclosed amount in 2022. (PR)
- ENHESA made a number of purchases in the chemical and product compliance space.
- EHSAi was acquired by Intelex for an undisclosed amount (PR)
- eCompliance was acquired by Alcumus (PR)
Back in 2018, I had suggested that , “As a purchaser of EHS solutions, it may be a good idea to incorporate an analysis of the owners, mergers and acquisition plan, and the style of management of the vendors in your procurement process.” I would say that this is just as true today as it was back then.
As large companies buy up smaller firms, there are two major effects. First, the smaller companies are rarely a priority for the large company and they get bogged down in bureaucracy and slow down on innovation. The smaller companies languish for a while and are eventually shuttered, merged into something larger or just act as a standalone entity with no real benefits going to the customer. The second major impact of these acquisitions is that the owners are no longer industry professionals, but rather financial executives and investors who are more interested in returns than in the underlying product. The financial types are less in touch with the customers and their needs and the priorities of the acquired company and the original customer begin to diverge. To see the impacts, you usually need to wait a few years. This is not always true and acquisitions of small companies can work out well – but in the long run very few acquisitions make sense for the original customer.
At Nimonik we are focused on acquiring companies that are as similar to us as possible. We look at company culture, product and customer base before we make any decisions. If all three line up well, then we work together to bring the customers of the acquired companies onto our platform and leverage the knowledge and experience of the acquired company to improve our product. The integration is rarely pain-free, but so far we have had great success delivering more value than ever to Nimonik customers around the world.
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