Privacy in the digital and physical world

By Greg Fincke, Managing Director, Equiteq

It’s been widely reported that Yahoo and AOL, both owned by Verizon’s business unit Oath, are reading users’ emails to more effectively target advertising.

The WSJ moves beyond the headline issue of privacy and into the privacy trade-off users make with their free email providers. There is an interesting connection here to the concept of “razors” and “blades”, discussed in a previous post.  Email could be seen as the razor to Oath’s blade, i.e. how they make money, online advertising. Trying to monetize their “expensive” razor is proving tricky. At the very least it has generated plenty of media attention regarding privacy concerns.

The WSJ article references Yahoo’s ad-free email service for $3.49/month. There have been attempts at pay-for privacy social media platforms in the past. It is interesting to think about the digital assets available to consumers and the price of privacy. My sense is most of us have always thought of online ad targeting as benign. But as we shift more of our lives to the digital world, learn more about how our data is being used (sometimes after the fact), and start questioning where the boundaries are it begs the question: is there a future for digital pay-for privacy?

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Digital strategy: Razors wanted

By Greg Fincke, Managing Director, Equiteq

I recently listened to Sunil Gupta’s HBR IdeaCast on digital strategy – a topic relevant to many, if not all, of our clients. After providing examples of failed approaches to digital strategy he rightfully points out that in order to be successful, strategies need to incorporate four components:

  1. Business strategy
  2. Operations and value chain
  3. Customer engagement
  4. Organizational structure

I think this is an incredibly helpful and balanced perspective. When advising companies in the knowledge economy and looking at the M&A focus of the large players, we see far too much focus on a single component, specifically customer engagement. There are perhaps a number of reasons for this, for example you can see immediate success, outcomes are more tangible, etc.

However, where we see organizations making significant strides is when they take a far more comprehensive approach to their digital strategy and look beyond the digital experience of the customer as their sole focus.

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Healthcare Consulting Insights: Healthcare Provider Consulting M&A

By Nicodemo Esposito, Managing Director and Ramone Param, Director

M&A activity is strong for specialized operational management consulting businesses that provide innovative, data-driven process improvement and cost reduction solutions

We continue to receive feedback from the most prolific buyers of knowledge-intensive services firms that expertise in helping healthcare providers with process improvement and operational efficiency is of high strategic importance for growth. A confluence of demographic, economic and regulatory drivers are forcing providers to improve care standards and enable efficiencies. Providers are also increasingly being compelled to invest in new digital technologies that can create data-driven productivity improvements and competitive advantages. These industry trends are driving strong demand and premium valuations for well-positioned operational consulting firms working with healthcare providers. Equiteq experienced this demand first hand in its sale of c3/consulting to Ankura. c3 has a track record of providing management consulting services to a variety of leading healthcare organizations in the US.

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GDPR: The opportunity for professional services consulting firms

The General Data Protection Regulation (GDPR), implemented May 25th, has introduced a range of new compliance and legal requirements for businesses across all sectors and industries, mainly the need to be accountable with personal data.

Equiteq, with insights from Bart Schermer of Dutch consultancy Considerati, examine the ways professional services consulting firms can turn the compliance burden posed by GDPR into a competitive advantage.

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Healthcare Consulting Insights: Life sciences strategy consulting M&A

By Matt Hasson, Managing Director and Ramone Param, Director

Buyers are paying premiums for specialized strategy consulting businesses that provide impactful product commercialization solutions for life sciences companies

Based on our in-depth discussions with global buyers and the recent flurry of M&A activity, acquisition demand for life sciences strategy consultancies is exceptionally high. Recent landmark acquisitions by both strategic and financial buyers were struck at premium valuation levels – and as the supply of high-quality acquisition targets continues to dwindle, valuation levels of independent consultancies of scale could rise even further.

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Case study: Supporting CMF Associates in their search for excellent value and a shared vision

Background

CMF Associates, a provider of transaction and transition-focused financial, operational and human capital solutions, was successfully sold to professional services firm CBIZ, Inc. The US-based firm services private equity firms and their portfolio companies across North America.

Equiteq were initially called upon to determine CMF’s market attractiveness and then hired as the exclusive sell-side advisor for the transaction process.

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8 ways to handle an unsolicited bid for maximum value

In a recent interview with Financier Worldwide, David Jorgenson, chief executive of Equiteq, suggests deal flow in 2018 will be supported by continued low interest rates and large pools of capital available for acquisitions among both strategic buyers and private equity investors.

With the forecast for M&A in 2018 predicted to be as lucrative as 2017, it’s anticipated businesses will continue to see a rise in unsolicited approaches from buyers. In fact, about a third of Equiteq transactions start with a client receiving an approach from a buyer.

However, despite a seller receiving an enquiry, there is no guarantee that a deal will be done. In reality, given the number of companies looked at by Trade and PE investors, the chance of it closing can be relatively low, so taking the right approach from the very beginning is essential in maximizing the opportunity and minimizing the opportunity cost of wasted effort.

In this blog Bruce Ramsay, managing director, business development at Equiteq, shares his thoughts on how best to manage the process from initial approach to a closed deal.

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How to fund an acquisition

In his three-part series, Build or Buy? Equiteq’s Adam Blatchford discusses the pillars for successful growth through acquisition. In part one Adam addressed the strategic advantages acquisitions can offer.

Here in part two, he looks at the ways a professional service firm can fund an acquisition.

Generally, M&A news tends to give the impression that acquisition is an exercise exclusive to huge corporations with big cash balances. In the last year the consulting sector has seen a number of multi-billion dollar deals, including Blackstone spending $4.8 billion for Aon’s HR Outsourcing business to create Alight Solutions, and $2.6 billion for British engineering consultancy Atkins from SNC-Lavalin.

This perception fails to scratch the surface of acquisitions and hides the real picture. Of more than 2,500 consulting deals that took place in 2017, the mean deal size was a more reasonable $69 million. The median deal was even lower at $12 million, meaning half of all deals took place below this threshold. These numbers are far more attainable for a ‘regular’ growth-stage business and demonstrate that an acquisition is more achievable than one might have initially thought.

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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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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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