Is 2014 the year when your long-held ambitions for you and your business start to bear fruit? Will a more positive economy help boost your own performance and stimulate improved prices from buyers? Is now the best time to start planning to sell or to take a more serious look at doing a deal?
The market certainly believes it’s a good time to sell. We’ve just published our Global Consulting Mergers and Acquisition Market Report 2014. The top-line? Last year we forecast a gentle upturn, and there is no doubt that has come to fruition. Our prediction now is that 2014 will see a significant growth in volumes and prices in the market. This is in line with the improving macro-economic climate and the general M&A market.
We are seeing a very significant rise in in the volume enquiries to Equiteq in all geographies from small and medium-size consulting businesses looking to exit through to larger consulting practices looking for help in finding and acquiring targets. That said, unlike the previous boom 2005 to 2007, we do not see a dash for just any sort of consulting capacity. Certainly, there will continue to be some large ‘acquisitions of scale’, but rather buyers are looking to acquire new capability that they can scale from.
The general feeling of optimism is supported by industry experts we talked to.
“There are good opportunities for consultancies to grow in 2014,” Alan Leaman, CEO of the UK Management Consultancies Association told us. “Our data shows a significant uplift in consulting as clients focus on securing new growth. In this market, there is bound to be interest in consolidation as well as growing individual consulting firms. The big challenge for both buyers and sellers of consulting firms will be to generate demonstrable added value.”
Most in demand specialists in 2014? We’re seeing real interest for consultancies at the ‘point of innovation’ for software firms e.g. cloud and mobile; those that can advise on big data; specialists in cyber security, and healthcare.
This is supported by Richard Stewart, CEO of specialist recruitment firm for management consultancies, Mindbench. He says demand for talent in healthcare, in particular, is significant this year, “this is being driven by major initiatives around clinical commissioning and the reorganisation of social care in the UK. Also talent with specific skillsets are in much demand, particularly in IT; experts that can advise on data.”
While these are in demand specialisms, for a consultancy to be attractive to buyers, it is important to have both a market focus and a set of unique capabilities that can be leveraged across the buyer’s network.
We’ll be exploring the results of our report over the next few weeks and the theme of ‘Is 2014 the Year to Grow or Sell?’ in our Equity Edge LinkedIn Group.
You can access the full Equiteq Global Consulting Mergers and Acquisition Market Report here.