Why the time is right to sell your IT services business
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These slides delve deeper into the findings from our latest Global Consulting M&A Report for the IT consulting industry. Looking at why deal values are remaining high, the volume of deals globally, and why the outlook for 2016 remains strong. Trends happening in the following sub-sectors are revealed: • Big data/data analytics • Cyber security • Cloud consulting • Enterprise applications consulting
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Why the time is right to sell your IT services business
- 1. Confidential© Equiteq 2016 equiteq.com Growing equity, realizing value Why the time is right to sell your IT services business
- 2. Confidential© Equiteq 2016 equiteq.com 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 2 Equity value realization Sale to a Strategic Buyer or Financial Investor Sell 50+ Deals Value creation and sale preparation Between 1 and 5 years ahead of a desired transaction Prepare 300+ 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
- 3. Confidential© Equiteq 2016 equiteq.com 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 3
- 4. Confidential© Equiteq 2016 equiteq.com Consulting market segment overview
- 5. Confidential© Equiteq 2016 equiteq.com Global deal activity up by 9.4% 5 2015 deal volumes returned to pre-crisis levels
- 6. Confidential© Equiteq 2016 equiteq.com 9.4% growth largely the result of management consulting and media consulting deals 6
- 7. Confidential© Equiteq 2016 equiteq.com IT deals saw a 3.1% growth from previous year 7
- 8. Confidential© Equiteq 2016 equiteq.com IT consulting overview
- 9. Confidential© Equiteq 2016 equiteq.com IT consulting – what we analysed Companies in this sector offer IT consulting, design, implementation and maintenance services at the application and infrastructure levels, transcending enterprise, mobile, social, digital and cloud technologies, 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 9
- 10. Confidential© Equiteq 2016 equiteq.com IT consulting deal volume at a 9 year high 10
- 11. Confidential© Equiteq 2016 equiteq.com Deal values remained consistently high 11
- 12. Confidential© Equiteq 2016 equiteq.com IT consulting deals involving Social, Mobile, Analytics and Cloud are increasing 12
- 13. Confidential© Equiteq 2016 equiteq.com Microsoft continues to lead the vendor focus, although SAP gained back positions over Oracle in IT consulting deals 13
- 14. Confidential© Equiteq 2016 equiteq.com Buyers were dominated by big consultancies 14
- 15. IT outsourcing
- 16. Confidential© Equiteq 2016 equiteq.com Deal volumes fell in 2015 following steady growth since 2012 16
- 17. Confidential© Equiteq 2016 equiteq.com Deals yielded high revenue multiples and low EBITDA multiples 17
- 18. Confidential© Equiteq 2016 equiteq.com Buyers are scaling their businesses by acquiring targets with similar capabilities 18
- 19. Confidential© Equiteq 2016 equiteq.com Big data/data analytics
- 20. Confidential© Equiteq 2016 equiteq.com Varied growth globally, with dips in North America 20
- 21. Confidential© Equiteq 2016 equiteq.com High revenue and EBITDA multiples 21
- 22. Confidential© Equiteq 2016 equiteq.com Broad set of buyers including Management, IT consulting and services, Media, Private Equity and Outsourcers 22
- 23. Cyber security
- 24. Confidential© Equiteq 2016 equiteq.com 43% increase in deal volume for North America 24
- 25. Confidential© Equiteq 2016 equiteq.com Revenue and EBITDA multiples at the high end 25
- 26. Confidential© Equiteq 2016 equiteq.com Cyber security is a top priority for large corporates 26
- 27. Cloud consulting
- 28. Confidential© Equiteq 2016 equiteq.com Steady growth in Europe, fast pace growth in USA 28
- 29. Confidential© Equiteq 2016 equiteq.com Lower profitability in this space results in higher EBITDA multiples 29
- 30. Confidential© Equiteq 2016 equiteq.com IT consulting, selective management consulting and media firms tend to target Cloud consulting 30
- 32. Confidential© Equiteq 2016 equiteq.com Decline in deals globally 32
- 33. Confidential© Equiteq 2016 equiteq.com 0.8x revenue multiple is lower than the 6 year median 33
- 34. Confidential© Equiteq 2016 equiteq.com Buyers place value on companies with clear and strong IP 34
- 35. Confidential© Equiteq 2016 equiteq.com 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 35 Big data/ Data analytics Cloud consulting Owners with sale ready firms are well positioned in 2016
- 36. Confidential© Equiteq 2016 equiteq.com Is now the time to prepare for a future sale, or sell your consulting firm? 36
- 37. Confidential© Equiteq 2015 equiteq.com More resources 37 A free source of information, advice and insight to help you prepare and sell your consulting firm Join at equiteq.com/equiteq-edge
Hinweis der Redaktion
- M&A report PAGE 25 Big Data / Data Analytics: Big data and analytics consulting M&A made a step change in 2013 after which deal volumes have remained high, as the market has matured and evolved over this period. The high revenue and EBITDA multiples in this area supports a trend in high global market demand for big data analytics technologies. The demand is generated from large or mid-sized firms who want the ability to find insight through new analytical methods, looking for smaller firms born out of data focused areas that have the capability but don’t have the commercial skills to extract and monetize insights. Our ongoing conversations at Equiteq with buyers of consulting firms highlight a broad level of acquisition interest in this area across strategy, operations, and technology consulting firms, professional services firms, media/marketing firms, outsourcers, as well as investment buyers (Private Equity). Cloud consulting: Global cloud-based consulting deals in the USA and Europe have been increasing steadily since 2010, with the US growing at a faster pace than the rest of the global community, and median EBITDA multiples area at an all-time high of 11.3x. Advances in cloud computing, cloud connected devices and improvements in mobile connectivity and speed are forcing companies to reshape and restructure delivery and execution of IT services. After years of consolidation in the enterprise application market, the emergence of cloud service providers has caused a refragmentation of the market, which in-turn drives demand for cloud consulting and advisory in the strategic, architectural and integration aspects of cloud technologies. The ongoing maturity of this market is likely to drive demand across this space, continuing the trend we’ve seen to date.