Insights of the Year – Our Top 10 Blogs of 2017

2017 was a busy year for Equiteq, closing deals and advising consulting firm owners on their growth and exit strategies across Europe, the US, Australia and Asia. Within our market there are unique takeaways and insights for owners to consider when thinking about a sale.

As owners and acquirers set their 2018 priorities, we recap the learnings from Equiteq’s most read blogs of 2017.

  1. Should I sell my consulting firm to an overseas buyer?

Here we discuss the opportunities overseas buyers present, how to attract them and how to deal with the challenges these approaches can bring.

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December 2017: Consulting M&A and Equity Market Update

By Ramone Param, Associate Director, Equiteq

Xafinity acquires Punter Southall businesses

Xafinity is acquiring the actuarial, pensions administration and investment consulting businesses of Punter Southall, in a deal valued at £153m. Xafinity provides pensions actuarial advice and administration services to 550 occupational pension funds in the UK. As part of the transaction, it will acquire Punter Southall Limited, Punter Southall Investment Consulting and Punter Southall Administration Limited for a combination of cash and shares. The deal is expected to create the largest pure-play pensions consultancy in the UK, with c.900 employees across the country, that generates over £100m of revenue. After the transaction, Punter Southall’s remaining operations will be focused on workplace savings, health and protection consulting and wealth management.

The deal is set to be the first major acquisition in the investment advisory industry since the Financial Conduct Authority referred the industry to the UK’s competition regulator. The referral is expected to result in new rules that distributes clients of the big three (Aon, Mercer and Willis Towers Watson), while driving consolidation amongst smaller advisers.

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How to attract the buyer that is right for you

Ramone Param, Associate Director, Equiteq recently led a webinar looking at how to attract the type of buyer that best aligns with a seller’s business strategy and future growth trajectory.

In the consulting sector, the majority of deals are undertaken by strategic buyers. One of the most prolific buyers, Accenture, completed seven deals in Q3 2017 alone. The involvement of private equity firms in the consulting sector has traditionally been cyclical, although recently there are many actively acquiring private equity investors within the sector.

When considering a sale, it is important to understand the differences in the way these two buyer groups approach transactions to ensure you are partnering with a buyer whose business strategy aligns with yours.

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2017 M&A trends

Steven Einstein, Equiteq’s newly appointed Vice Chairman, offers his thoughts on the trends experienced in the M&A market in 2017.

Despite a politically-charged global environment and the increasing number of regulatory hurdles, the high levels of M&A experienced in 2016 have been resilient in 2017 and we have also seen the continuation and evolution of a number of trends.

Looking at M&A broadly, we are seeing that regional differences are no longer as prevalent. In an increasingly global economy, acquirers from Europe and North America alike are taking an active role, canvassing the global market place for M&A opportunities that support their non-organic growth ambitions.

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November 2017: Consulting M&A and Equity Market Update

By Ramone Param, Associate Director, Equiteq

  • There was notable deal activity across the knowledge-led services industry.
  • Major deals included Permira’s investment in Duff & Phelps, Navigant’s acquisition of Quorum, PwC’s acquisition of cDecisions and RGP’s acquisition of Accretive Solutions.
  • Equiteq was pleased to advise Livingbridge Australia on their acquisition of TSA Management.
  • The Equiteq Consulting Share Price Index remained stable over the month.

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Demand for acquisitions set to grow in 2018

Our fourth annual global survey of buyers of consulting businesses delivers current, actionable intelligence in the five segments Equiteq specializes in: Management consulting, IT consulting, Media & Marketing, Engineering consulting and HR consulting. Findings, published today, reveal:

  • Buyers expect to initiate 50% more acquisitions year-on-year
  • Convergence continues to be a key trend as buyers look to diversify
  • 55% of buyers think targets could be better at communicating their market proposition
  • 94% of buyers say it is important to retain management teams post-acquisition
  • Over 70% of targets do not make their IP apparent to prospective buyers
  • Three quarters of buyers expect at least 40% of a target’s clients to be blue chip
  • Deal structures are improving for sellers

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October 2017: Consulting M&A Update

By Ramone Param, Associate Director, Equiteq

There was notable activity in October from a range of prolific acquirers of consulting firms, particularly those active within the IT Services segment. Major deals included DXC Technology’s acquisition of Logicalis SMC, Orange Business Services’ acquisition of Business & Decision and Office Depot’s acquisition of CompuCom. There were also two notable digital acquisitions announced by Cognizant and three healthcare-focused deals announced by Atos. Equiteq was also pleased to advise VISEO on their acquisition of Singapore-based IT Services firm NAIT Consulting and property consulting firm McBains Cooper on their sale to RSBG.

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