Why Sendero Bought Torq: A Conversation with Bret Farrar, Founder and CEO of Sendero Consulting

Key Insights:

• No Layoffs, More Hiring: Sendero hired roughly 160 people last year and expects to add another 150 to 200 this year. Farrar says no one is leaving either firm because of the acquisition.
• AI Is Reviving Custom Software: Farrar's deal thesis is a third era of enterprise software. AI has dropped the cost of building bespoke applications, so companies can design around what makes them different instead of bending to a package.
• The Middle of the Market Stays Thin: Farrar describes consulting as a dumbbell standing on end: hundreds of small firms at the bottom, global firms at the top, and few substantial independents in between. He expects the bottom to get busier as new technology creates new specialists.

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Sendero Consulting's acquisition of Torq Consulting marks the firm's first deal in its 22-year history – and a significant expansion of its technology capabilities. The combination adds Torq's strengths in custom application development, data and analytics, and AI to Sendero's industry-led transformation platform.

Management Consulted spoke with Bret Farrar, founder and CEO of Sendero Consulting, about why the firm chose to buy rather than build, how AI is changing the economics of bespoke software, what the deal means for clients and employees, and why he expects consulting M&A to remain active.

Editor's note: This conversation has been edited for clarity, readability, and length while preserving the interviewee's perspective and voice.

Inside the Sendero and Torq Deal

Management Consulted: Sendero has historically grown organically. Why was acquiring Torq preferable to building its AI, data, and product-engineering capabilities internally?

Bret Farrar: Sendero is an organic growth story. We have never done an acquisition before, and we have built strong entry-level hiring and development programs that create a leadership pipeline all the way through the organization. That has helped us build a strong culture and consistent high-quality delivery.

At the same time, organic growth can be double-edged. Sendero has historically been organized vertically around industries. Our people understand the sectors we serve, the trends affecting those sectors, and the problems our clients face. We wanted to complement that depth with horizontal technology capabilities in areas such as application development and data and analytics.

Our original plan was to build those capabilities organically because that is what we have always done. But we also knew that, if the right opportunity presented itself, we would consider an acquisition. Torq was the right company at the right time.

There is essentially no client overlap – we did not share a single client – and very little capability overlap. Torq's legacy is much more horizontal and technical, particularly in application development and data and analytics. We could immediately see Torq becoming a powerful digital arm for Sendero.

Where we did find meaningful overlap was in culture. Both firms are people-focused, client-oriented, and committed to developing talent. My wife, Ruth, and I founded Sendero after beginning our careers at Arthur Andersen, which later became Accenture. Torq's founders also came from a major professional-services firm, Deloitte. All four of us learned consulting from the ground up. We were remarkably similar in the ways that mattered, yet different in ways that were genuinely complementary.

Building these capabilities ourselves would have required changing how our people think – from a primarily vertical orientation to a horizontal one – and then persuading clients to see us differently. Clients naturally put firms in a box. With Torq, that perception changed overnight. After we briefed clients on the acquisition, both firms immediately began receiving requests for meetings about the new capabilities.

This is not a scale play or a cost-efficiency play. It is a capability and top-line revenue play. We believe the combination expands the pie for both organizations.

Management Consulted: Is the central deal thesis that AI will make bespoke software more attractive relative to rigid, off-the-shelf systems – and that Torq enables Sendero to build those solutions at scale?

Bret Farrar: Absolutely. When I began my consulting career, custom development was the norm. I was a COBOL developer – we built systems around each client's unique business processes. The advantage was a precise fit, but the work was expensive and time-consuming.

Then the market entered the packaged-software era. Packaged systems lowered costs and accelerated implementation, but there was a trade-off: companies often had to adapt their processes to the software's standard, out-of-the-box model.

I believe we are now entering a third phase: the bespoke-development era. AI is lowering the cost and time required to build custom applications. That gives companies a new opportunity to design processes around what differentiates them rather than simply conforming to a package. It opens possibilities for greater personalization, customization, and competitive differentiation.

The same principle applies to data and analytics, another area where Torq brings significant strength. Companies have invested in data warehouses and business intelligence for decades, but the value has not always matched the early promise. Pair AI with strong data engineering, however, and organizations gain a much greater ability to work through massive datasets and uncover insights that would have been difficult to identify before.

The result is not just bespoke systems; it is bespoke insights and experiences. That can help clients differentiate themselves and serve their own customers in ways that were previously impractical.

This transition will not happen overnight, and packaged software will remain important – especially in highly regulated or mission-critical areas. The future will be a mix. But AI is dramatically expanding the range of situations in which custom development makes economic sense, and we believe Sendero and Torq are on the leading edge of that change.

Management Consulted: How does the combination create value in both directions – for Sendero clients and for Torq clients?

Bret Farrar: The opportunity is absolutely two-way. Sendero clients gain access to Torq's technical capabilities in custom development, data, analytics, and AI. Torq clients gain access to Sendero's enterprise-scale transformation capabilities and industry depth.

Torq has excellent blue-chip clients and has already been helping them transform, but it has not always had the scale or breadth of capabilities that Sendero has built. Together, we can bring more to those organizations and pursue larger, more complex transformations.

Both companies could have grown into the other's capabilities over time. But by combining two strong firms, we can deliver more to both client bases much faster than either organization could have done alone. We can also compete together for net-new work that neither firm would have been positioned to win independently.

There should also be benefits to how we deliver. Sendero was already using AI to improve productivity and bring new approaches to clients before the acquisition, as was Torq. Torq deepens that capability in custom development and data and analytics, while Sendero contributes enterprise scale and delivery experience. AI can help us develop applications more effectively, improve the quality of insights, and increase productivity across many other areas of consulting work.

Management Consulted: Acquisitions often raise concerns about consolidation and job cuts. What should Sendero and Torq employees expect?

Bret Farrar: This is not an efficiency play, and it is not about reducing headcount. No one is leaving Sendero or Torq as a result of the acquisition, and there are no acquisition-related layoffs. We need everyone – and then some.

Both firms are growing. Sendero hired roughly 160 people last year, and we expect to hire at least another 150 to 200 this year, potentially more. The goal is to add capabilities, serve more clients, and grow revenue, not to shrink the combined organization.

That growth orientation is also why cultural compatibility mattered so much. We wanted a company that shared our commitment to people, client service, and talent development. Technical capability alone would not have been enough.

What This Signals for Consulting M&A

Management Consulted: Does this acquisition create a repeatable M&A playbook for Sendero, or was Torq a one-off opportunity?

Bret Farrar: It was not a one-off, but we are also not switching to an M&A-led growth strategy. I told our employees not to interpret the fact that we had gone 22 years without an acquisition as evidence that we would never make one. It is evidence that we were deliberate and prepared ourselves to do the right transaction successfully.

We developed an inorganic-growth strategy and a set of guiding principles about six years ago. Since then, we have seen many opportunities, but the timing, capabilities, or fit were not right. Torq checked the boxes: the right time, the right capabilities, and the right culture.

There will always be a buy-versus-build decision. By nature, Sendero will often lean toward building because organic growth is our legacy and something we do very well. But there may be other companies with horizontal capabilities – Salesforce or SAP expertise, for example – that would allow us to leapfrog years of internal development.

I am an “and” person, not an “or” person. We will continue to grow organically, and we will remain open to strategic acquisitions when they add a differentiated capability and fit our culture.

Management Consulted: What does the transaction suggest about the direction of consulting M&A over the next year?

Bret Farrar: Consulting has traditionally been an active M&A market, and I do not expect that to change. I picture the industry as a dumbbell standing on end. At the bottom are many small firms, often with five to 100 consultants. At the top are the global firms – Accenture, Deloitte, EY, KPMG, and others. The bar connecting those two ends is relatively thin because there are far fewer substantial, independent firms in the middle.

Small firms are continually acquired, and relatively few grow through that middle section. Sendero sits in that bar. That gives us a distinctive proposition: we have meaningful scale, but we retain an entrepreneurial feel and can be easier to work with than a highly bureaucratic global organization.

I expect the bottom of the market to become even more active. New technologies will keep creating opportunities for specialized consulting firms. Some will disappear quickly; others will reach 20, 30, 50, 70, or 100 people and then be acquired by larger platforms.

The barbell shape will remain, but innovation will make the lower end increasingly busy. New firms will continue to form around emerging technologies and capabilities, and larger firms will move quickly to acquire the most promising ones.

Final Thoughts – Sendero's Acquisition of Torq

Farrar was blunt about the intent. This deal adds capability and headcount, and both firms are still hiring. That matters if you're recruiting. Sendero just added 90 consultants and expects to hire 150 to 200 more this year, and the roles it needs now sit between industry knowledge and technical delivery. Candidates who can talk about both have a real opening here.

The wider read is on the market. If Farrar is right that AI has made custom development economical again, the firms winning work over the next few years will be the ones pairing industry depth with real engineering capability. Most mid-sized firms will buy that capability rather than build it, which means more deals like this one and more job titles that didn't exist two years ago.

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Sendero and Torq Acquisition FAQs

What did Sendero Consulting acquire?
Sendero Consulting acquired Torq Consulting, a Plano, Texas-based firm focused on AI-powered custom development, data engineering, and analytics. The deal closed in July 2026 and added roughly 90 consultants.

Are there layoffs from the Sendero and Torq acquisition?
No. Farrar said no one is leaving either firm as a result of the deal and there are no acquisition-related layoffs. He described it as a capability and revenue play, not a cost play.

Is Sendero Consulting hiring?
Yes. Sendero hired about 160 people last year and expects to hire at least another 150 to 200 this year, possibly more.

Why did Sendero buy instead of building the capability internally?
Sendero is organized vertically by industry and wanted horizontal technology capability in application development and data analytics. Building it would have meant retraining its own people and then convincing clients to see the firm differently. Farrar said client perception changed overnight once the acquisition was announced.

Will Torq keep its name?
Yes. Torq continues to operate as "Torq, a Sendero Company," keeping its Plano headquarters and leadership team.