5 minutes with Equiteq’s Pat Webb

1. Name and job title

My name is Pat Webb and I’m a Client Director

2. What do you do at Equiteq?

I have two hats. I’m part of the Business Development team in North America but most of my time is helping owners and management teams prepare their firms for sale. I help them focus on the issues which are dragging their equity value down so that when we take them to market we’ll get them the best possible price.

3. What do you think is the most interesting aspect of working with consultancies?

Focus is the key to equity growth (easy to say but hard to do). All manner of things can get in the way, sometimes even the owners themselves! So, the most interesting aspect is advising on what to do, and the right order to tackle things, to drive up equity value.

4. What do you enjoy the most about working at Equiteq?

The work is challenging, the people are smart and there’s a culture of comradery – that’s a pretty potent combination!

5. If you weren’t doing this job, what would you be doing?

I grew up in Scotland but I’ve never been to a Whisky Distillery; I now live in Vancouver but I’ve never walked the West Coast Trail; I’m a lifelong book lover but I haven’t read every book on my bookshelves, so I’d probably be exploring more of the world.

6. What is the proudest moment of your career?

There’s excellent research about how one’s personal values shift over a lifetime from entry level through mid-career to late career. I think rather than identify my proudest moment, I would just say that I’m glad I’ve paid attention and lived from my values especially when that’s meant swimming against the tide.

7. What’s the most interesting experience you’ve had recently outside of the world of work?

Our house has been thoroughly chomped upon by a succession of BC & Alberta Guide Dog puppies-in-training! Only about 50% of the dogs graduate as seeing-eye dogs. Many of the others are retrained as Autism Assistance Dogs and some go on to work as Canine Concierges in high profile hotels where they attract lots of positive publicity which in turn helps with awareness and fundraising.

8. What is the most powerful lesson you’ve learnt in your career?

I need to be able to answer three questions in the mind of a client: can I trust you, do you care about me, can you deliver?

If you’d like to contact Pat, please email her on Pat.Webb@equiteq.com

David Jorgenson appointed as new CEO at Equiteq to develop and execute our global growth strategy

We have made several key appointments across our US and UK offices to broaden our global leadership team. Equiteq operates from offices in London, New York, Singapore and Sydney.

New York based David Jorgenson, who joined Equiteq two years ago as Global Head of M&A, succeeds Paul Collins as CEO of Equiteq. Jorgenson has advised business owners, shareholders and C-level executives on every aspect of growth and value realization during his 20-year career as a technology consultant and investment banker. He is an expert in every aspect of corporate financial advisory – from valuation, strategic financial advisory, public and private equity and debt financing, exit planning, M&A strategy and execution.

Collins, who will take on a new role within Equiteq as Chairman of the Board of Directors, commented: “Following expansion into North America and Asia-Pacific, Equiteq is closing a record number of deals and will benefit from a new team to take it forward. David is a very experienced advisor in the professional services and IT services space and is uniquely suited to lead Equiteq in its next phase of growth.”

Jorgenson, has made two new appointments: Nicodemo Esposito, has been promoted to Managing Director, Head of M&A and Strategic Advisory North America and Alex White, previously Head of Private Equity at BDO Corporate Finance, joins Equiteq as Managing Director, Head of M&A and Strategic Advisory Europe. Jean-Louis Michelet will continue to lead the Asia Pacific region as Managing Director, Head of M&A and Strategic Advisory Asia Pacific.

Jorgenson commented: “Equiteq has developed a unique business model combining deep industry expertise with premier transaction capabilities. I am very excited about the opportunity to develop our global execution model and continue delivering outstanding outcomes for our clients.”

To read more about our team, please click here. 

Key trends in the Australian B2B services M&A market

Australia & ChinaIn 2014 Australia became the second largest M&A market in Asia-Pacific, behind only China in volume and value terms. And across all industries, 2015 saw Australia M&A totals reach $146b, versus $117b in 2014, highlighting that there are exciting opportunities for both sellers and buyers in the “Lucky Country”.

The B2B services market in Australia is mature and vibrant across a number of segments, such as digital marketing and engineering. And while growth has slowed as a consequence of the evolution of the Chinese economy and the mining industry, it’s good timing for acquirers seeking targets and for sellers interested in joining larger organizations. The Australian dollar is at its lowest point against the US dollar in 7 years, a situation that is particularly appealing for international buyers. The country is demonstrating economic stability with prudent policy making, close trading relationships with China and well-targeted fiscal stimulus. The middle market and SMEs are the cornerstone of the Australian economy.

All the major global players in B2B services have operations in Australia and cross-border deal flows are healthy, with foreign investment (30% from the US, 45% from Asia, 10% from the UK) and outbound acquisitions.

Data from our Global Consulting M&A Report 2016, the only publicly available information on the global consulting M&A market, found that 75% of deals done worldwide were completed by only 5 countries: the US, UK, Australia, France and Canada.

Figure 18

Asia Pacific accounted for around 13% of all deals, largely driven by activity in Australia. The country experienced 3% growth in 2015 deal volumes, recovering from a 2014 decrease in deal activity of 5.8%. Its deal volume increases in 2015 were aided by falling commodity and currency prices that helped keep acquisition targets in the region competitive to international buyers.

Our research shows that buyers’ acquisition expectations have more than doubled in the past year. This reflects a growing M&A market in consulting, IT and other segments, underpinned by buyer appetite that continues to increase in size and volume across corporate and private equity buyers. With Australia having seen 25 years of consecutive economic growth and enjoying a thriving B2B services sector, we can see an exciting year of activity in this market.

If you are preparing to sell your consulting firm and would like to discuss your exit plans, please contact Pierre Briand, Managing Partner, on Pierre.Briand@equiteq.com

Facts and figures on Australia:

  • Population of 24m with Melbourne and Sydney combined reaching almost the 10m mark
  • 2015: GDP +2.3%, CPI +1.7%, unemployment rate 5.9%, GDP/capita US$64k
  • 12th economy in the world and AAA rating
  • IT and new tech sector ca $50b
  • Australia’s “soft power” in Asia: 260,000 Asian students in Australia

Are you a member of Equiteq Edge? It’s full of content to help consulting firm owners prepare for sale and sell their business. Register here to gain full access.

Equiteq Sells Global Health Strategy Consulting Firm Rabin Martin to Omnicom Public Relations Group, part of Omnicom Group Inc.

Rabin Martin tombstone 2
We are pleased to announce the sale of Rabin Martin to Omnicom Public Relations Group, part of Omnicom Group Inc.  Equiteq was the exclusive financial advisor to Rabin Martin, an innovative global health strategy consulting firm working with clients at the intersection of business, philanthropy, policy, and public health to solve some of the world’s largest health challenges. 

Rabin Martin has been a driving force in creating numerous high-profile global health initiatives to improve primary care, treat chronic disease, enhance women’s health and prevent the spread of infectious diseases. Their roster of clients includes leading healthcare companies, non-profit organizations, foundations, and universities. The firm’s long-standing relationships with key public-and private-sector health leaders help to catalyze major improvements in global public health around the globe.

With an accomplished, multi-disciplinary team of professionals located in New York, Los Angeles, London and Geneva, Rabin Martin will continue to be led by Jeffrey L. Sturchio, PhD, President and CEO along with Rebecca Hoppy, Managing Director and Partner and Kate Schachern, Partner.

Equiteq CEO, David Jorgenson, commented, “Rabin Martin has built an impressive leadership position in the industry through innovative strategic offerings delivered by an impressive team. We thoroughly enjoyed working with Rabin Martin’s leaders, and are excited about their opportunity to grow within Omnicom Public Relations Group.”

On Equiteq’s role as lead advisor, Jeff Sturchio, President and CEO of Rabin Martin, added, “Equiteq’s expertise in consulting and professional services M&A delivered unique value to Rabin Martin during this process.  Their experience and guidance were invaluable in preparing us for sale as well as executing a successful transaction process.”

Registering free for Equiteq Edge will allow you to access content and insight to help you prepare your business for sale or sell your business.

Consulting Sector M&A Deals (May 3rd – May 16th)

businessman doing handstand on the beachWashington D.C.-based Brittenford Systems, Inc. Joins Wipfli LLP
Deal Size: Undisclosed Industry: Professional Services Date: May 3rd, 2016
Wipfli LLP (Wipfli), one of the top 20 accounting and consulting firms in the United States, announced today that Brittenford Systems, Inc. joined the firm effective May 1. Brittenford Systems, Inc., a firm headquartered in Reston, Virginia, provides accounting system, enterprise performance management, and CIO Advisory services to small and mid-market businesses and nonprofit organizations.
“The addition of the seasoned professionals and extensive software development expertise of Brittenford Systems, Inc. will strengthen the firm’s ability to provide even more innovative solutions to our clients, helping them face their challenges today and well into the future,” said Rick Dreher, managing partner of Wipfli LLP. “While this merger will greatly enhance our firm and its consulting practice, it holds even greater benefits for our clients.”
Brittenford Systems, Inc. specializes in providing financial system and accounting software implementations and support services to hundreds of businesses and organizations around the country, focusing specifically on Microsoft Dynamics SL, Microsoft Dynamics GP and cloud-based Intacct and Host Analytics, as well as Brittenford’s own third-party products. The majority of the firm’s clients are small and mid-market businesses, nonprofit organizations, government contractors, professional services firms and international businesses. As part of this combination, approximately 30 Brittenford Systems, Inc. professionals, including chief executive officer Shereen Mahoney, have joined Wipfli. Founded in 1997, Brittenford Systems, Inc. has one office located in Reston, Virginia (Washington D.C. area), but provides financial system and accounting software implementations and support services to hundreds of businesses and organizations around the country.
Shereen Mahoney, chief executive officer of Brittenford Systems, Inc., said, “Combining Brittenford Systems’ deep implementation and third-party enhancement expertise with Wipfli’s broad consulting capabilities and vast resources will help us to continue to help our clients to succeed in the ever-changing marketplace. We are excited to join Wipfli and for what the future holds for our combined firm and all of our clients.”
The combined firm will have over 1,500 associates, including 184 partners, 35 office locations in the United States and India. (http://www.cwrichmond.tv)

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Should you sell to a private equity buyer?

Eight mistakes when building a sale-ready business

Private equity (PE) – or financial – buyers differ from trade buyers in that the former acquire strictly to make a return on their invested equity. Trade buyers (also referred to as strategic buyers) acquire to realize long-term strategic value by combining the two firms. Because of this, PE buyers will look for specific traits in a target and selling to a PE buyer will have different implications for a consultancy than selling to a trade buyer.

To make a return on their invested equity, PE buyers look for a company that has value enhancement potential and acquire it at a favorable price with financing. With consultancies, they are attracted by the relatively high profit margins compared to other industries, high levels of profit to cash conversion, the potential for high growth if a consultancy is in a hot sector, and the barriers to entry that can be maintained if proprietary expertise is retained and leveraged through intellectual property.

Conversely, returns can be risky since the company’s core assets (people) can walk out the door. And since most consulting work is project based, future forecasts are difficult to predict. Nevertheless, PE firms that focus on knowledge-based businesses know what to look for and will carefully consider investing in consulting firms to complement one of their existing businesses or as a standalone investment.

Once acquired, they enhance the value of the firm during the ownership period through a variety of ways such as: providing the capital to fund investment in the business for organic or acquisitive growth; strategic advice through board membership; and providing market access through relationships and potentially through other businesses in their portfolios that can help smooth entry into new markets or geographies.

PE owners then exit their investment after a period of growth (typically 3–5 years) at a higher price than their entry point. Sometimes this is through an initial public offering, but far more commonly it is through selling the firm to a trade buyer.

The advantages of being acquired by a PE buyer as opposed to a trade buyer is that your firm remains independent, your identity and brand will continue unaffected and you retain more operational control than if you had been bought by a corporate buyer. PE buyers can also offer more flexible deal structures, which provide greater options for sellers in terms of liquidity and taking money off the table. Although in their initial acquisition consideration PE buyers do not have synergies that enable a higher purchase price, they often have a more rapid value creation plan than most strategic buyers, which can enable them to be competitive on pricing.

However, there are also some important considerations that may not be as favorable. PE ownership typically involves majority control of your firm and a seat at the board. So although your firm will remain independent, the PE owner typically has significant influence on the direction of growth and key strategic decisions. As your firm is expected to grow rapidly, the pace of change will need to be managed carefully to avoid attrition of your staff and to retain the culture, which remains an important element of people-based firms. Furthermore, your payout as an owner staying with the firm may be staggered: one at the point of initial investment and a bigger payout after the PE firm exits its investment, since the focus in the interim will be on growing significant value in your firm. So you effectively have a bigger second bite of the apple in payout terms.

In a competitive sale process, PE buyers will be quicker to act and meet with you than other strategic buyers, as they are constantly sourcing firms in the market. Strategic buyers will take longer to consider the potential fit and only selectively meet with the right acquisition target firms. Sellers should take this into consideration when in a competitive process.

As future potential owners, you will need to see PE buyers as a growth partner. All parties will have skin in the game, so if your strategy is realized all will remain happy, but if growth stagnates or starts to decline, be prepared to be put under a microscope.

Why not watch our video in which one of our deal experts looks at which type of buyer might be the best fit for you business.

NB: The term ‘trade buyer’ refers to those who acquire for strategic purposes and includes in it our definition of consulting and corporate buyers.

This blog is condensed from a more in-depth article that you access here.

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

Are you a member of Equiteq Edge? It’s full of content to help consulting firm owners prepare for sale and sell their business. Register here to gain full access.

Consulting Sector M&A Deals (April 20th – May 3rd)

businessman doing handstand on the beach
Wood Group Acquires Ingenious
Deal Size: Undisclosed Industry: Engineering Consulting Date: April 22, 2016
Wood Group has acquired Ingenious Inc., a supplier of proprietary software and consulting services to the global chemical, oil & gas, and energy industries. The acquisition provides a strong MOM systems capability that builds upon and diversifies the capabilities of Wood Group Mustang’s automation and control business, within which it will operate. Ingenious’s software products consist of remote performance monitoring, production planning and scheduling, and training, including e-learning and training simulators for the process industries.
Founded in 2000 by Vibhu Sharma and Bharat Kamdar, Houston-based Ingenious provides consulting and engineering services to support software sales and non-software-related services such as process engineering, design and simulation, and process safety management. Ingenious has an office in Mumbai, India, that supports regional customers, executes international projects and assists in software development. The Mumbai operations expand the automation and control business’s geographic footprint and client relationships in Asia and the Middle East.
Wood Group will be able to leverage Ingenious’s strength in the operator training simulator market to enhance its control system simulators, training tools and services.

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Sales and profit growth (Part 1)


Lately, we’ve been running 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’re going to be sharing and answering these questions in a series of blog posts. This week we’re looking at the first part of the Q&A session during the webinar on what your company’s sales and profit numbers say about how you run your business.

  1. What is more important in terms of growth – revenue or profit?

The answer is both! Ideally a buyer wants to see that an acquisition target can grow the top line while maintaining the profit margin at a healthy level (around 15% – 20% for most consultancies). Some consultancy buyers may pay closer attention to revenue growth, as this shows scalability of the business and post-acquisition, the profits will change as the target firm is integrated with the buyer’s business. However, profits are important as the key value indicator and if profits are declining, this may cast doubt on the way the firm is managed and whether the acquisition will be value-enhancing for the buyer in the short term.

Buyers are always looking to exploit potential synergy and scope for further growth, and they will ideally look for both revenue and profit growth as indications of market demand and good management respectively.

Ultimately, consultancy buyers are only interested in growing consultancies; one year of negative growth can set the clock back on the optimal time to sell the business.

Click here to find out which of your revenue streams are the most valuable to a buyer.

  1. What percentage of revenue should be allocated to marketing? Is there a cap?

It isn’t necessary to have a cap on marketing; however, every firm must learn to manage the amount of demand it wishes to create in line with its ability to deliver on the projects it wins.

For instance, if your firm is going through a period of high utilization and is working close to capacity, then you might want to hold back or slow down your marketing spend for future campaigns. The key is to do this without risking a dry pipeline once your capacity becomes free. Creating demand for services which you are then unable to deliver can be damaging for the business, so it’s important to balance your sales and marketing spend.

  1. Earn-outs are common when buyers acquire services firms. Can they be avoided?

It is true that earn-outs are very popular with services consultancy buyers. This is because these types of buyers usually aren’t buying transactional assets; they are buying people and their capabilities. The risk is that if all of the money is paid up front, owners and stakeholders can leave or become less motivated to continue to deliver. To alleviate this risk, buyers offer earn-outs.

Sometimes, to make the proposal more competitive, buyers would offer a differently balanced earn-out without increasing the value of the overall offer.

But, while earn-outs seem to be the norm, they are by no means absolute. It is not unusual for non-consulting buyers to acquire a consultancy outright.

The second half of the blog will be published in the coming weeks.

To sign up to listen to a recording of this webinar, please click here. To view other webinars in the series, please click here.

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

Are you a member of Equiteq Edge? It’s full of content to help consulting firm owners prepare for sale and sell their business. Register here to gain full access.

Equiteq advises Spire Research and Consulting Group on merger with Yamada Business Consulting Co. Ltd.

Spire Tombstone
We are pleased to announce the merger of our client, Spire Research and Consulting Group, with Yamada Business Consulting Co. Ltd (YBC), one of Japan’s largest consulting firms. Equiteq acted as exclusive financial advisor to Spire.

YBC acquired an 80 per cent stake in Spire Research and Consulting Pte Ltd, the parent company for the Spire Research and Consulting group of companies. Leon Perera, the co-founder of Spire, will continue to serve as the CEO of the group, retaining a 20 per cent stake.

The merger makes Spire part of a  much larger and publicly listed corporate group, which is expected to create more access to new consulting solutions, economies of scale, investment resources and synergistic business development possibilities. With the merger, the Spire Research and Consulting brand will become the global brand for YBC outside of Japan.

Leon Perera, Chief Executive Officer of Spire, said: ”Joining the Yamada Consulting Group is the opening of a key chapter in the life of Spire Consulting & Research. I am grateful to Equiteq for the valuable support their Singapore team have provided throughout the process, from the preparation phase to the closing of the deal.”

Jean-Louis Michelet, Head of Equiteq in Asia Pacific, commented: ”Leon Perera and the Spire team have been great partners with Equiteq in this project, and the efficiency of the process owes much to the excellent mutual understanding among the parties. We are glad and proud to have contributed to this success.“

Keisaku Masuda, Managing Director of Yamada Business Consulting, added: ”I am looking forward to seeing the synergies coming to fruition between the two organisations and the development of our group being boosted by this strategic move. We have appreciated all the work done by the Equiteq team to support Spire, but also  help the two parties reach a fair and balanced agreement.”

Registering free for Equiteq Edge will allow you to access content and insight to help you prepare your business for sale or sell your business.