Employee benefits consulting firm The Segal Group has acquired Touchstone Consulting Group in a move that will strengthen its client base, Segal Group President and CEO David Blumenstein says.
Under the new arrangement, finalized Jan. 1, the five staffers of Touchstone Consulting will remain in its Worcester, Mass., office and now work for Sibson Consulting, the division of The Segal Group that provides HR and benefits consulting to large companies, higher education institutions and nonprofit organizations. Former Touchstone President David Peck will serve as vice president and retirement consultant for Sibson.
With the addition of Touchstone’s staffers, clients and array of retirement, health and welfare employee benefit consulting services, Blumenstein says the acquisition strengthens both firms.
He says that it is harder for smaller, more boutique firms to stay viable due to the increasing cybersecurity compliance demands from clients. “We invest heavily in [cyber security] and we believe that it's a competitive advantage now in the marketplace when people are buying our services,” he says.
Overall, the goal of the acquisition, Blumenstein says, was “to capture more market share, to have some really nice clients that we wanted to be able to work with, and also to deepen our expertise.”
Common history
According to Dan Fries, a senior vice president with Sibson Consulting, both companies have known and worked alongside each other for nearly 20 years and have had some clients in common.
“We've even had been in situations filled where we've audited each other's work on some common clients. That's not uncommon in our world where a client will ask a firm to audit another firm’s work,” say Fries.
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Fries adds that Touchstone’s core emphasis on employee benefits means that both firms have common technology vendors, so integrating the two companies should not present any challenges. The new arrangement “enhances essentially what we were already doing on the retirement and health and welfare side,” says Fries.
The Segal Group has grown through a number of mergers and acquisitions since its founding in 1939. In 2002, The Segal Group acquired HR and compensation consultancy Sibson Consulting, and added Irwin Tepper Associates, a consulting firm that offered asset-liability analysis for employee benefit programs in 2006. In 2014, Segal acquired the HR consulting division of Waters Consulting and a portion of Moroni Fantin, an employee benefits consulting firm.
Blumenstein declined to say if there would be more in 2018. He did say M&A deals are the perfect way for smaller firms to gain strength.
“Smaller firms are actually seeing a lot of pressure, in terms of infrastructure, in terms of expertise. And, the level of sophistication that the clients are asking for is growing. Clients are asking us for more in terms of tools, technology platforms, and smaller firms just don't have the capability to make those kinds of investments.”
