2018 is proving a robust M&A market for successful consultancy firms globally thus far. Deal volumes are high and valuations remain at attractive levels relative to recent history.
A number of key structural themes run through the analysis in our latest Consultancy sector review. There is an ever-widening appreciation of the attractions of balancing the traditional project-led nature of consultancy work with the recurring revenues offered by managed service offerings. The allure of securing two to three year frameworks – or better still actual contracts – to provide advisory support is considerable and the consequences for business valuation significant given the market’s propensity for paying higher multiples for businesses with strong contracted order books.
This naturally begs the question of what makes a client that is used to dipping in and out of its advisory relationships to enter into an exclusive managed service arrangement. The answer is invariably access to proprietary data and analysis that drives efficiency and improves performance for clients, generally as a result of sustained investment by an adviser in a technology platform and associated tools that provide clients with unique insight into their own businesses, their own customers or their market.
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