Houlihan Lokey Advises IMPAQ

Transaction: Houlihan Lokey Advises IMPAQ

Houlihan Lokey is pleased to announce that IMPAQ has been acquired by American Institutes for Research (AIR). This transaction underscores continued market interest in government services businesses that apply differentiated capabilities to critical mission challenges and demonstrate a significant degree of recession resilience. The transaction was announced on May 5, 2020, and closed on May 18, 2020.

Headquartered in Columbia, Maryland, IMPAQ is a global policy research and data analytics firm focused primarily on vital health and human services programs and initiatives. The company applies advanced capabilities in data modeling, artificial intelligence, machine learning, and predictive analytics to deliver valuable, evidence-based insights that enable more effective delivery of citizen-centered health and human services. IMPAQ’s team of 370 statisticians, data scientists, and other professionals has delivered measurable improvements in healthcare service delivery, program cost, and patient safety, while transforming other vital government programs in areas, including workforce development, education, and international development. The importance of such programs is particularly pronounced during periods of economic uncertainty when vulnerable populations require increased access to healthcare and other human services programs designed to improve the lives and wellness of citizens.

The sale of IMPAQ to AIR underscores the strong resilience of differentiated government services companies during the current public health crisis. We anticipate that government services companies with established market leadership positions in their core markets, solid contract portfolios, and strong future growth prospects will continue to garner premium valuation multiples. Furthermore, companies focused primarily on supporting the most vital missions of their core customers, which typically demonstrate a high degree of stability during periods of broader economic uncertainty, will continue to attract buyer interest. Below is a listed description of several important characteristics of IMPAQ’s business which drove value.

  • Scale and Market Leadership Position Supporting Vital Health and Human Service Programs. IMPAQ has a dominant presence supporting the Centers for Medicare & Medicaid Services (CMS), with a particular emphasis on supporting priority CMS initiatives encompassing alternative payment models, quality care, and healthcare access. As a leading prime contractor on the strategic $5 billion CMS RMADA 2 vehicle, IMPAQ is well-positioned to support CMS’s most important innovation initiatives. The company also maintains significant relationships with several other health and human services customers which have strong funding stability given the current economic environment, including the Department of Labor, for whom the company provides vital support for economic and workforce development programs.

  • Solid Track Record of Growth and Strong Tailwinds Supporting Future Growth. IMPAQ has sustained a long-term, consistent track record of year-over-year growth since its founding in 2001. Given the current public health crisis and associated rising unemployment, the company’s core customers and vital programs will see continued funding growth in the coming years. Such tailwinds will enable the company to continue to generate market-leading growth.

  • Highly Unique Capabilities and Track Record of Innovation. IMPAQ applies a unique combination of policy, research, data analytics, and technology expertise to deliver dramatic improvements in the delivery of citizen-centered health and human services. The company has differentiated itself from its policy-focused peers by investing heavily in advanced analytics capabilities which enable the company to deliver valuable analytical insights to its clients. IMPAQ has leveraged its significant cadre of data and computer scientists to develop its own portfolio of technology solutions aimed at addressing its clients’ most important analytics challenges.

Established in 1946, with headquarters in Washington, D.C., AIR is a nonpartisan, not-for-profit organization that conducts behavioral and social science research and delivers technical assistance both domestically and internationally in the areas of education, health, and the workforce.

Houlihan Lokey served as the exclusive financial advisor and assisted in marketing, structuring, and negotiating the transaction on behalf of IMPAQ.

Houlihan Lokey's Aerospace, Defense & Government (ADG) practice within the global Industrials Group is a leading M&A advisor to aerospace, defense, and government services companies in the United States. Since 2016, the practice has closed over 80 transactions worth more than $14 billion in enterprise value. With a staff of approximately 30 investment bankers in Washington, D.C., Chicago, Los Angeles, and Europe, Houlihan Lokey's ADG practice is among the largest dedicated industry banking teams worldwide. In 2019, the Industrials Group was once again ranked as the No. 1 M&A advisor for all U.S. industrial transactions according to Refinitiv (formally known as Thomson Reuters).

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