2016, the best year since 2007 to sell your business

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


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


Overall market trends


Global deal activity increased by 9.4% in 2015. What next?!

2015 deal volumes

returned to pre-crisis

levels


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


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.


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%


2,418 targets were bought by 1,886 different buyers


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


Consulting market segment overview


9.4% growth largely the result of management consulting and media consulting deals


Management consulting has a 21% share of M&A market

Management consulting sector analysis covered in webinar on 24 May.

See www.equiteq.com


IT consulting deal volume is at a 9 year high

IT consulting sector analysis covered in webinar on 10 May.

See www.equiteq.com


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


Engineering consulting deal volumes grew by 4.7% to 365 deals


HR consulting deal volumes grew by 8% but with a revenue multiple downturn


Geographic overview


North American deal volumes increased significantly by 20%


European deal volume grew by 5.9% to 813 transactions


Asia Pacific saw an overall decline of 4% despite growth in Australia and China


Africa and Middle East accounted for 2% of global deals and saw a 22% decrease in deal activity.


South America experienced a 16.9% decline, although Mexico saw an increase


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


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


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2016, the best year since 2007 to sell your business