Q3 2018 Knowledge Economy Global M&A Update

Global deal values and valuation multiples continue to rise led by media agencies and IT services M&A

By Ramone Param, Director, Equiteq

  • The number of completed deals rose 12%
  • Median deal sizes nearly doubled vs. Q3 2017
  • Activity remains focused on media agencies and IT services
  • Strong rises in M&A in North America and APAC
  • Equiteq Knowledge Economy Share Price Index pushes to new highs

The global M&A market across the knowledge economy was strong in the third quarter of 2018. Market data from the quarter reflects a key trend we have been monitoring over the last eighteen months: global buyers are pushing ahead with larger deals at premium prices. This is partly down to strategic buyers and private equity having record capital available for M&A. Given the low interest rate environment, there is pressure to deploy this capital on larger transactions. Particularly amid increasing signs that quantitative easing programs are coming to an end across developed economies.

The following summarizes the main trends discussed in more detail in our recent Q3 2018 M&A update report.

Continue reading

Knowledge economy M&A activity was solid in 2017, with digital disruption driving demand and premium valuations

By Ramone Param, Director, Equiteq

2017 was a year of continued growth for Equiteq and further disruption of business models, which is transforming the industry that we have been tracking for 15 years. The disruption of the traditional consulting model from technology-enabled innovation, combined with economic trends, has led us to transition the definition of our industry coverage from consulting to the broader transforming knowledge economy. Our Global Knowledge Economy M&A report delivers you with actionable intelligence into the latest M&A and equity market trends across the knowledge economy, along with tips on how to consider these findings in the context of growing and selling your consulting or technology firm.

Continue reading

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.

Continue reading

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.

Continue reading

Q4 Global Consulting Market M&A Update: Overall a modest decline quarter over quarter with large variations between regions and segments

  • Global deal activity fell 1% on prior quarter
  • Strong growth in M&A in North America and APAC
  • Management consulting sees strongest performance
  • Robust demand for healthcare consulting capabilities
  • Equiteq Share Price Index continues to rise

By Ramone Param, Associate Director, Equiteq

Access the full Q4 2017 Global Consulting Mergers and Acquisition Report. 

The final quarter of 2017 saw global deal activity in the consulting sector fall by 4% year-on-year and decline 1% as compared to the third quarter. As frequently observed, there were significant variations in deal activity by region and amongst market segments. There is strong buyer appetite for deals as we commence 2018. Continue reading

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.

Continue reading

Q3 M&A Update: Robust overall global deal activity across the consulting sector, with large variations by segment

  • Overall global deal activity +1% year-on-year
  • Strong rise within Management Consulting and Media segments
  • Strongest deal flow in North America
  • Equiteq Consulting Share Price Index reaches new highs

By Ramone Param, Associate Director, Equiteq

Overall global deal activity in the consulting sector rose by 1% year-on-year. Deal volumes were flat as compared with the second quarter. These overall trends masked large variations in deal activity amongst market segments. The Equiteq Consulting Share Price Index continues to show record highs as investor confidence in the sector remains strong.

M&A Activity strongest in the Media Agency and Management Consulting segments

Despite notable deals occurring in HR and IT, deal activity fell in these segments. There was a strong rise in M&A within Management Consulting and Media. Engineering deal activity rose strongly against the prior quarter, but remains broadly flat on the same quarter last year.

Continue reading

Equiteq advises CMF Associates on its sale to CBIZ, Inc.


Equiteq is pleased to announce that it has advised CMF Associates (“CMF”), a leading provider of financial and operational consulting services to the private equity sector, on the sale of its business to CBIZ, a national, publicly-traded professional business services firm.

This transaction highlights Equiteq’s position as the leading global provider of advisory services exclusively to firms in the knowledge-intensive business services sector.

Founder and Managing Partner at CMF, Thomas Bonney said, “CMF sought a committed partner who shared our growth-oriented vision of scaling our position as a premier service provider to private equity and their expanding portfolio. We found in CBIZ an advocate that will provide us with offices across the country, complementary tangential services and the resources to drive portfolio value creation in a more comprehensive way and on a national scale.”

Continue reading

May 2017: Consulting M&A Update

By Ramone Param, Associate Director, Equiteq.

FIS sells majority stake in Capco to private equity

Clayton, Dubilier & Rice announced their acquisition of a 60% majority stake in Capco from FIS, a leader in financial services technology. Capco is the public brand for FIS’ management consulting business and specializes in business, digital and technology consulting services for the financial services industry. FIS acquired Capco for $292m in 2010 and will receive net cash proceeds of $477m from the sale, while retaining a 40% stake in the business.

New Mountain acquires OneDigital Health and Benefits

OneDigital, one of the top buyers that we identified in the HR space, announced that it has been acquired in an all-cash deal by private equity investor New Mountain Capital. New Mountain is acquiring a majority ownership in the business from Fidelity National Financial Ventures for a reported $560m. The investment will be aimed at providing strategic guidance and industry expertise, while helping drive OneDigital’s continued growth.

OneDigital is the United States’ largest provider of employee benefits services and offers employers a combination of strategic advisory, analytics, compliance support, HR capital management tools and comprehensive insurance offerings. The business serves 35,000 companies and manages c.$4 billion in premiums.

Continue reading

The highest price for your consulting business may well come from outside your core industry

The most prolific acquirers of knowledge-led businesses are undergoing unprecedented diversification and convergence across adjacent consulting segments and sectors. At the same time, digital transformation is driving hybrid business models with consulting, technology and managed service revenue. This change is fuelling high levels of M&A activity from trade and private equity investors, which we review in our 2017 M&A report. For owners considering selling their business, an appreciation of these trends is critical to uncovering the synergistic buyers that may offer the highest value.

Convergence between consulting offerings

Global consulting clients are increasingly looking to their advisors for best-in-class, end-to-end consulting solutions. These trends are driving established consulting buyers to use M&A to enter new geographies and acquire complementary capabilities.

Continue reading