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Confidential© Equiteq 2016 equiteq.com
Growing equity, realizing value
Why the time is right to sell your IT services 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
Consulting market segment overview
Confidential© Equiteq 2016 equiteq.com 5
Global deal activity up by 9.4%
2015 deal volumes
returned to pre-crisis
levels
Confidential© Equiteq 2016 equiteq.com 6
9.4% growth largely the result of management consulting and media consulting deals
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IT deals saw a 3.1% growth from previous year
Confidential© Equiteq 2016 equiteq.com
IT consulting overview
Confidential© Equiteq 2016 equiteq.com 9
IT consulting – what we analysed
Companies in this sector offer IT consulting, design,implementation and maintenance services at theapplication and infrastructure levels, transcendingenterprise, mobile, social, digital and cloudtechnologies, including:
• IT Strategy and Architecture• IT operating model design• IT sourcing / outsourcing• Enterprise Resource Planning• IT programme & project management• Application design and development• Information security / Cyber• Business Intelligence, Data management & Data
Analytics• System integration• Infrastructure design and implementation
Confidential© Equiteq 2016 equiteq.com 10
IT consulting deal volume at a 9 year high
Confidential© Equiteq 2016 equiteq.com 11
Deal values remained consistently high
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IT consulting deals involving Social, Mobile, Analytics and Cloud are increasing
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Microsoft continues to lead the vendor focus, although SAP gained back positions over Oracle in IT consulting deals
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Buyers were dominated by big consultancies
IT outsourcing
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Deal volumes fell in 2015 following steady growth since 2012
Confidential© Equiteq 2016 equiteq.com 17
Deals yielded high revenue multiples and low EBITDA multiples
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Buyers are scaling their businesses by acquiring targets with similar capabilities
Confidential© Equiteq 2016 equiteq.com
Big data/data analytics
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Varied growth globally, with dips in North America
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High revenue and EBITDA multiples
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Broad set of buyers including Management, IT consulting and services, Media, Private Equity and Outsourcers
Cyber security
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43% increase in deal volume for North America
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Revenue and EBITDA multiples at the high end
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Cyber security is a top priority for large corporates
Cloud consulting
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Steady growth in Europe, fast pace growth in USA
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Lower profitability in this space results in higher EBITDA multiples
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IT consulting, selective management consulting and media firms tend to target Cloud consulting
Enterprise applications consulting
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Decline in deals globally
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0.8x revenue multiple is lower than the 6 year median
Confidential© Equiteq 2016 equiteq.com 34
Buyers place value on companies with clear and strong IP
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So what does this mean for IT 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 outlook for the IT consulting industry remains strong as firms increase their reliance on novel technological trends such as social media, analytics, mobile and cloud.
2016 high profile M&A hotspots
Big data/ Data
analytics
Cloud consulting
Owners with sale ready firms are well positioned in 2016
Confidential© Equiteq 2016 equiteq.com 36
Is now the time to prepare for a future sale, or sell your consulting firm?
Confidential© Equiteq 2015 equiteq.com
More resources
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