The digital consultancy Bounteous is merging with Accolite Digital, and together they plan to become a billion-dollar company in five years.
Bounteous and Accolite Digital offer different, yet complementary services. The private equity firm New Mountain Capital, which invested in both companies in 2021, instigated the idea for this merger late last year.
Bounteous, a Chicago-based consultancy, mostly works with chief marketing officers in North America and designs customer-facing experiences. Its clients include Coca-Cola, Caesars Entertainment, Domino’s, and others, and it largely competes with other consultancies like Accenture and Deloitte Digital, Bounteous CEO Keith Schwartz told Business Insider.
Accolite, based in Dallas, builds products that large enterprises use internally. For instance, it built a wearable device for FedEx that detected fatigue among drivers and pilots and ran predictive analytics to identify potential accidents, Accolite CEO Leela Kaza told Business Insider. FedEx used this data to make pilots’ schedules and truck drivers’ routes more efficient, and now licenses that software to other carriers, Kaza said.
Accolite’s clients include telecommunications and financial services companies, including Goldman Sachs, Prudential, and BT. It mostly works in India, but it also has presences in the US, Canada, Mexico, and Europe.
The decision to merge happened when New Mountain noticed that Accolite clients would ask for design services that are Bounteous’ expertise, and Bounteous clients would ask for help with their cloud infrastructure and data analytics, which is Accolite’s focus, said New Mountain managing director Prasad Chintamaneni.
The combined firm will have 5,000 people and be headquartered in Chicago. Schwartz and Kaza will both lead the combined company. For now, the merged company will be called Bounteous X Accolite, although Kaza said they will finalize its new name in May.
Kaza will oversee areas like human resources and operations, and Schwartz will oversee sales, marketing, and finance. The companies will have minimal layoffs post-merger, Kaza said, though there will be some redundancies in support functions.
“I look at all sorts of mergers and possibilities, and sometimes there’s a tremendous amount of overlap,” said Schwartz. “In this case, there’s a tremendous amount of white space.”
The road to $1 billion
The two companies’ combined revenue is nearing half a billion, and they have big plans to hit the billion-dollar mark in about five years.
To get there, Bounteous X Accolite is banking on 2024 as a year of modest growth, with real acceleration in 2025 and 2026, said Kaza.
“That’s when you’re going to start heading towards that billion-dollar figure,” Kaza said.
The company will then supplement its projected organic revenue growth with M&A, looking for “strong firms” that can work with marketing tech from Salesforce and Adobe in regions like Latin America and Eastern Europe, Kaza added.
“You do these things to make the company better, not bigger,” Schwartz said. “If you make the company better, clients reward you with more work, and you will grow.”