why 2016 is the year to sell your management consultancy

Confidential© Equiteq 2016 equiteq.com

Growing equity, realizing value

Why is 2016 the year to sell your management consulting firm?

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


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


Management consulting overview


Global deal activity up by 9.4%

2015 deal volumes

returned to pre-crisis

levels


Management consulting – what we analysed

Firms engaged in business performance improvement consulting at the strategic or operational levels, including:

• Strategy advice or implementation• Change management• Operational performance improvement• Project and programme management• Human capital and organisational development• Financial business advisory• Economics advisory• Real estate advisory• Healthcare consulting• Risk Management


Management consulting deals experienced the largest increase over previous year


Management consulting deals represent 21% of all consulting M&A


2015 EBITDA values higher than the 5 year median although revenue multiples saw a decrease


Buyers acquiring in complementary areas was exemplified in a few landmark deals

Strategy consulting


Deal volumes increased in North America by 43% and in Europe by 37.5%


Revenue multiples of 1.4x and EBITDA 6 year median multiple of 8.1x indicates healthy valuations


There is a strategic focus on both digital and analytics as a capability


Operations consulting


Europe saw a deal volume increase of 37.5%


2013-2015 median revenue multiple was higher than 6 year median but median EBITDA multiple was lower


Rationale for acquisitions mainly based on improving supply chain, logistics cost efficiency and procurement optimization capabilities

Transformation & change management


European deals grew by 56%


Steady high revenue multiples and increasing EBITDA multiples


Buyers want to advise their clients on how to optimize strategy, sales, culture, operations and technology to enable digital as an embedded aspect of a business


Financial advisory


2015 volumes are recovering after a drop in 2012


Growing demand implied by stronger multiples


Acquiring advisors gives acquirers a quicker influx of expertise


Compliance, regulation, governance


European M&A largely drove the 5% increase in deal volumes


Valuations were significantly stronger for the 2013-2015 period when compared to 2010-2012


Buyers looking to deepen expertise to address a growing demand, as clients face the pressure to comply with regulatory requirements


So what does this mean for management 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

The Management consulting sector enjoys a high level of profitability, as the result of the high fees paid for strategic and operational advice that have significant impacts on clients.

2016 high profile M&A hotspot

Strategy consulting

Owners with sale ready firms are well positioned in 2016

Compliance, Regulation

and Governance


Is now the time to prepare for a future sale, or sell your consulting firm?


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why 2016 is the year to sell your management consultancy

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