Do you have enough deal support as you prepare for sale?


By David Jorgenson, CEO, Equiteq.

Preparing for sale and going through the sales process is time consuming and potentially a very distracting procedure. Interested buyers will demand huge amounts of information on an ongoing basis. And while you’re compiling this, you must also ensure that the day-to-day running of the business continues on its positive trajectory to retain value.

At the heart of the deal support is a finance director (FD) who is up to the task. The FD and finance department are of crucial importance as you will need someone who can stay on top of the hundreds of questions that will be asked during due diligence. If you don’t have someone like that on the team then hire in a contractor; treat selling the business like you would any other project and resource it appropriately.

As well as financial reporting, the FD will also need to keep a close eye on the visibility of booked work and the pipeline. If there are discrepancies between what is forecast and what work occurs, this raises concerns in the minds of investors. Is the consultancy disorganized? Is there internal confusion? Are different processes being used? The FD will need to be on top of the financials and forecast and be able to update the view of the future performance quickly, as this will be requested frequently when a company is being examined for acquisition.

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How to create marketing IP that generates consulting leads


By Jason Parks, Director – Strategic Advisory Services, Equiteq.

We spend a lot of time talking about the three types of consulting intellectual property (IP) with our clients:

  • IP to run the business
  • IP to deliver and scale the work
  • IP to market and sell the business (often referred to as ‘content’)

Of the three, marketing IP is the forgotten child.

Consulting is a crowded and vague market. You’ve got to be heard above the noise and differentiate yourself. To do that and sell higher value work, your sales and marketing engine has to have content that opens and closes sales opportunities.

Specifically, marketing IP does this by:

  • Reducing the perceived risk in hiring you
  • Making you more “findable”
  • Demonstrating expertise
  • Enabling your inbound marketing to attract better qualified prospects
  • Making your outbound marketing campaigns more effective

Simply put, marketing IP is an umbrella term used to describe any type of information used in some way to acquire customers. This information can be in the form of blog posts, articles, eBooks, DIY or how-to guides, industry news, question-and-answer articles, case studies, whitepapers, videos, podcasts, slide presentations — the list goes on and on.

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Award Season shines bright for Equiteq

As the business award season is upon us, Equiteq is delighted to have been named a finalist in key awards on both sides of the Atlantic. The M&A Advisor Awards brings M&A industry leaders together to recognize and honor the top performers, whilst The Lloyds Bank National Business Awards is the UK’s most prestigious awards programme, showcasing businesses achievement.


The M&A Advisor Awards

The M&A Advisor Awards has been recognizing the leading dealmakers, firms and transactions since its inception in 2002. Celebrating the creativity, perseverance and ingenuity of the M&A industry’s professionals, the 2016 ceremony takes place on 9th November, at which Equiteq are finalist in the following 4 categories:

  • Professional Services (B-TO-B) Deal of the Year
  • Corporate and Strategic Acquisition Deal of the Year (over $25-$50mm)
  • Cross Border Deal of the Year (Over $50-$100mm); and
  • Boutique Investment Banking Firm of the Year – International.

Read full press release here.

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Answering your questions on Intellectual Property (Part 1)


We recently held a series of free 30-minute webinars to help attendees grow the equity value in their consultancy firms and prepare for a sale of their business. Attendees at each webinar submit questions, and we’ve been sharing and answering these questions in a series of blog posts. This week we’re looking at the questions asked during the webinar on how well-managed intellectual property (IP) can enable your consultancy to scale and command a premium price at sale.

1. Can you explain further about the need to protect IP trade secrets and yet still provide the depth of information necessary to market the business?

It is important for consultancies to share high-quality articles, presentations, reports and materials with clients and prospects. Doing so will help consultancies demonstrate industry knowledge and domain expertise. A large percentage of your IP should be readily available to prospects and other stakeholders.

But how do you control access to trade secrets? The foremost priority for any consultancy in such a situation is to understand: (a) who needs to know (b) who needs to have access and in what format? (c) who controls the access to these trade secrets? While there isn’t a shortage of senior executives in charge of marketing, operations, etc., it surprises us how many consultancies fail to assign someone to manage IP. Therefore, appoint a senior member of management to control IP and make sure that they come up with a plan to address the considerations above.

To guard against the misuse of IP firms should make use of non-disclosure agreements and non-compete clauses in employment contracts for when employees leave the business. Internally, consultancies should make clear to staff what it considers IP and train them on how to use and store it safely. Then, the company should enforce this rigorously within the organization.

Why not click here to learn more about how to build intellectual property to drive equity value in your consulting firm.

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Equiteq sells SAP data management consultancy to SNP AG

Equiteq is pleased to announce the sale of Harlex Management Ltd (“Harlex Consulting”) to SNP Schneider-Neureither & Partner AG. Equiteq acted as exclusive financial advisor to Harlex Consulting.

Harlex Consulting is a SAP gold services partner and Tech Track 100 company which helps clients to define and drive clear business advantage through data transformation and data governance.

Dr. Andreas Schneider-Neureither, CEO, SNP AG said about the deal: “The clear focus on corporate IT transformations as well as the structured project approach make Harlex Consulting an ideal partner: SNP will gain access to a highly trained team of experts in the field of SAP data migration. Harlex Consulting also possesses an impressive customer base and extensive project experience. Furthermore, the acquisition will enhance the SNP Group’s presence in the British market. The cooperation offers significant synergy and sales potential.”

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September 2016: Consulting Market Update

businessman doing handstand on the beach
Consulting M&A Activity and Equiteq Consulting Share Price Index Performance

In September, we saw a number of high-profile deals being announced, particularly amongst buyers in the IT consulting and broader technology sector. This month also saw the performance of many listed consulting players contained within the Equiteq Consulting Share Price Index being positively impacted by macro-events such as poll results following the debates in the lead up to the U.S. elections and OPEC’s tentative agreement to cut oil production.

Accenture, a listed consultant tracked within the Equiteq IT Consulting Share Price Index, reported quarterly earnings above estimates, highlighting strength in their new bookings and an expansion in their profit margins. The announcement was followed by a 4% jump in their share price.

Accenture remains highly acquisitive, announcing three notable acquisitions this month:

  • DayNine, a leading 400-person global Workday consulting firm. The acquisition builds on past acquisitions by Accenture to strengthen its enterprise cloud services offering.
  • Kurt Salmon, a retail-focused consulting business and part of Management Consulting Group plc (MCG) was acquired for $165m in cash payable on completion. MCG’s disposal of Kurt Salmon follows recent exits from its healthcare and French operations, leaving MCG focused on its international operational performance consulting subsidiary Alexander Proudfoot.
  • OCTO Technology, a French IT consulting business focused on digital transformation and software development. The deal valued OCTO at €115m.

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How sustainable is your consultancy’s performance as you prepare for sale?


By David Jorgenson, CEO at Equiteq.

Selling your business is a long and demanding process that can last anywhere from 4 to 9 months. During this entire time the business needs to continue to show the same growth trajectory as in the years leading up to the sale – all the while dealing with the added demands of compiling the information required by those investigating whether they’d like to make an offer.

Potential investors continually monitor the company’s financial forecast throughout the process as this is an excellent lead indicator as to whether the business is being well managed. If the forecast is inaccurate by a large amount (either low, or high), this will set off alarm bells with buyers, so it needs to be reliable. If what you forecast differs dramatically from what actually eventuates, this needs to be addressed as a priority before thinking about selling.

This links to how much visibility of booked work versus the budget the company has as it enters the process. A firm with significant work booked 12 months ahead is more appealing than one with work booked only 3 months in advance. However the work also needs to be happening when it’s scheduled to happen, as unlike product sales – in consultancy there’s no way of making up lost time; once a day has passed with someone sitting on the bench due to a start date being pushed back then that day – and fee – is gone.

Continuing the theme of forward visibility, buyers will also be scrutinizing how the company is doing against its current year plan. If it’s behind, then they will want to know why. But even if it’s ahead, this is not necessarily a good thing as it shows inaccuracy in the planning.

People are of course the resource that drives the most value in a consultancy-style business, so if there is high staff turnover – especially key staff such as senior salespeople – then this will worry buyers. Are your key strategic people happy and well looked after to ensure that they don’t seek out other employment opportunities? If they’re walking out the door they’re likely taking with them some of the value you want to sell in the business.

The sales process itself impacts on employees in a number of different ways. If staff are excited about the potential buyer and new work opportunities it may bring, or even increased remuneration, then this can increase motivation. However, if the buyer is not seen as stimulating then the opposite can be true. Staff may have to help compile information for the sale which can add to their workload and decrease their motivation; you don’t want their performance dipping as you’re trying to maintain profit growth.

The buyer could also impact on the clients the company is able to sell to once the deal goes through. For example, if a management consultancy is sold to one of the Big 4 who audits an important client of the consultancy, then this will mean that they can no longer sell in consultancy services, impacting upon revenue.

There are a lot of balls to juggle during the sale process and to ensure you achieve the best possible price, they all need to be kept in the air. Dropping one could see a potential buyer dropping out.

If you are preparing to sell your consulting firm and would like to discuss your exit plans, please get in touch.

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