Sagard Capital Increases Stake In ICF International


Hedge Fund/PE Fund (depending on who you ask) continues buying spree in shares of consulting firm.

Sagard Capital filed its Schedule 13D in November 2012 disclosing its 5.5% position in consulting firm ICF International, IncSagard increased its position to 6.5% in December and again increased to 7.6% as of the date of this writing.  The filings show Sagard buying consistently from at least early October 2012, at times on a daily basis and multiple times per day.

Sagard’s purchase prices range from the low $18’s to the low $23’s/share.  ICFI closed at $22.80 on the day of this writing.

ICF International is a consulting firm that does most of its work for the U.S. federal government and additional work for state and local governments.  Those familiar with this industry understand that contracts and payment cycles occur more like fits and starts than a regular annuity.  This would explain some extreme volatility, within a price band.

You may know Sagard from such deals as:

Sagard states that its strategy:

“is to acquire significant minority or control positions in publicly traded small and mid-sized companies. We offer a unique and highly differentiated value proposition to companies looking for supportive, long-term shareholders. Sagard, based in Greenwich, Connecticut, is an evergreen fund with an indefinite holding period for its investments. We are purpose-built to be independent, flexible, supportive partners to management teams focused on building sustainable, leading businesses and generating long-term shareholder value. We call this Impact Investing.™”

This is closer to private equity than hedge fund or activist investing, which should not be too surprising since Sagard’s roots are with Bain.  In addition, ICF International seems to fit in Sagard’s portfolio for consulting shops.

This isn’t as interesting to read about as the activist fights, but Sagard’s initial Schedule 13D did say that:

“the Reporting Persons may engage in communications with one or more shareholders of the Issuer, one or more officers or employees of the Issuer, one or more members of the board of directors of the Issuer (and/or committees thereof) and/or one or more representatives of the Issuer regarding the Issuer, including but not limited to its operations, business, results, plans, strategy, existing and new markets and customers, budgets, prospects, ownership structure, management team composition, board composition (which could include the idea that a representative(s) of the Reporting Persons be nominated or elected to the board of directors of the Issuer) and management. The Reporting Persons may discuss ideas that are consistent with, that complement, or that diverge from, the Issuer’s current and future strategy and initiatives. The Reporting Persons may discuss ideas that, if effected, may result in acquisitions by persons of additional securities of the Issuer, an extraordinary corporate transaction involving the Issuer, changes in the Issuer’s capitalization and/or changes in the board of directors or management of the Issuer. In particular, the Reporting Persons may in the future suggest that the board of directors of the Issuer consider strategic alternatives, including any of the foregoing actions.”

Usually, that sort of language is code for “we have some liquidity events we’d like to discuss with you, either in your office or at the proxy fight.”  We’ll keep an eye on it.

Management Consulting 101 per Don Cheadle, “House of Lies”

Sagard/ICF Schedule 13D
Sagard/ICF Schedule 13D/A, Amendment No. 1
Sagard/ICF Schedule 13D/A, Amendment No. 2

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