Confidential© Equiteq 2016 equiteq.com
Growing equity, realizing value
Why is 2016 the best year since 2007 to sell your business?
Confidential© Equiteq 2016 equiteq.com 2
Equiteq is the leading M&A firm focused exclusively on the consulting sector
What we do for our clients Global presence and consulting industry credentials
Equity value realizationSale to a Strategic Buyer or Financial Investor
Sell50+ Deals
Value creation and sale preparationBetween 1 and 5 years ahead of a desired transaction
Prepare300+
Clients
Why we’re different• Deep domain expertise in the Consulting sector
• Add value and engage at any stage in the exit destination journey
• Unique blend of consulting, corporate finance and investment banking skills
NEW YORK
LONDON
SINGAPORE
Established in 2004 Regular AMCF USA speaker
50 people across 3 continents Regular MCA UK speaker
Clients in 27+ countries Widely published in industry media
SYDNEY
Confidential© Equiteq 2016 equiteq.com 3
Global Consulting M&A Report 2016
• 9th consecutive year• Over 100,000 downloads to date• Compilation and analysis of all 2015 consulting deals
world-wide• Compiled using:
– Proprietary news feeds– M&A data subscription services– Unique intelligence from our daily interaction with buyers and
sellers– Equiteq commissioned independent research of global
consulting sector buyers
Confidential© Equiteq 2016 equiteq.com
Overall market trends
Confidential© Equiteq 2016 equiteq.com 5
Global deal activity increased by 9.4% in 2015. What next?!
2015 deal volumes
returned to pre-crisis
levels
Confidential© Equiteq 2016 equiteq.com 6
Revenue multiples are at a post-crisis peak
Deal values
• 83% of deal volume is below $100m• 35% acquisition values under $5m• 70% under $40m
Deal multiples
• EBITDA 8.9x• Revenue 0.9x
Confidential© Equiteq 2016 equiteq.com 7
Range of EBITDA multiples, 2015
0.0x 3.0x 4.0x 5.0x 6.0x 7.0x 8.0x 9.0x 10.0x 11.0x 12.0x 15.0x0%
2%
4%
6%
8%
10%
12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
FrequencyCumulative Deals Done
EBITDA Multiple
Prop
ortio
n of
Dea
ls
Ranges are on a ‘up-to’ basis i.e. bar chart with 4.0x means multiples between 3x – 4x. Last bar: 15-20x.
Confidential© Equiteq 2016 equiteq.com 8
83% of all consulting M&A are in developed western markets
• North America: +4%• Asia Pacific: -2%• Europe: -2% (deal volumes up 6%)• Africa, Middle East and South America: -1%
Confidential© Equiteq 2016 equiteq.com 9
2,418 targets were bought by 1,886 different buyers
Confidential© Equiteq 2016 equiteq.com 10
10 target countries by deal volume account for 83% of the total
• 75% of deals completed by only 5 countries: US,UK, Australia, France and Canada• 24% chance your European firm will have a foreign buyer• 92% of US consulting firms have a domestic buyer• 442 cross border deals completed in 2015
Confidential© Equiteq 2016 equiteq.com
Consulting market segment overview
Confidential© Equiteq 2016 equiteq.com 12
9.4% growth largely the result of management consulting and media consulting deals
Confidential© Equiteq 2016 equiteq.com 13
Management consulting has a 21% share of M&A market
Management consulting sector analysis covered in webinar on 24 May.
See www.equiteq.com
Confidential© Equiteq 2016 equiteq.com 14
IT consulting deal volume is at a 9 year high
IT consulting sector analysis covered in webinar on 10 May.
See www.equiteq.com
Confidential© Equiteq 2016 equiteq.com 15
Media consulting deal volumes grew by 12.6% with a record high of 625 deals
Media consulting sector analysis covered in webinar on 17 May.
See www.equiteq.com
Confidential© Equiteq 2016 equiteq.com 16
Engineering consulting deal volumes grew by 4.7% to 365 deals
Confidential© Equiteq 2016 equiteq.com 17
HR consulting deal volumes grew by 8% but with a revenue multiple downturn
Confidential© Equiteq 2016 equiteq.com
Geographic overview
Confidential© Equiteq 2016 equiteq.com 19
North American deal volumes increased significantly by 20%
Confidential© Equiteq 2016 equiteq.com 20
European deal volume grew by 5.9% to 813 transactions
Confidential© Equiteq 2016 equiteq.com 21
Asia Pacific saw an overall decline of 4% despite growth in Australia and China
Confidential© Equiteq 2016 equiteq.com 22
Africa and Middle East accounted for 2% of global deals and saw a 22% decrease in deal activity.
Confidential© Equiteq 2016 equiteq.com 23
South America experienced a 16.9% decline, although Mexico saw an increase
Confidential© Equiteq 2016 equiteq.com 24
So what does this mean for consulting firm sellers?
2016 consulting M&A outlook
• Q1 2016 deals show no slowdown• Continued optimism in the market but with less
growth than recently• Buyer demand continues to be positive• More sellers are now in the market taking advantage
of the positive deal conditions• As companies look for innovation ways to cope with
changing technological, economic, competitive and regulatory environments professional services firms will continue to be in demand
2016 high profile M&A hotspots
Strategy consulting
Compliance, regulation and
governance
Big data/ Data
analyticsCloud
consulting
Digital marketing
Property/ Real estate
advisory
Recruitment & Interim
management
Owners with sale ready firms are well positioned in 2016
Confidential© Equiteq 2016 equiteq.com 25
Is now the time to prepare for a future sale, or sell your consulting firm?
Confidential© Equiteq 2016 equiteq.com
More resources
26
A free source of information, advice and insight to help you prepare and sell your consulting firm
Join at equiteq.com/equiteq-edge