Business Services review & 2018 outlook

Our analysis of M&A transaction activity in the Business Services sector in 2017 demonstrates that the market continued to be extremely buoyant throughout the year. The market is currently flush with cash, whether from corporates, private equity sponsors or lenders, looking for high quality assets to invest in for growth and returns. In addition, appetite and confidence has not been deterred by the well-publicised economic risk posed by Brexit.

In total, there were 489 UK deals worth nearly £120bn reported in the year, spread fairly evenly over the quarters. This represents c.20% volume uplift on M&A activity levels in 2016. The shortage of assets versus the availability of capital has driven valuations up to a cyclical high-point, averaging nearly 10x EBITDA over the year.

Looking forward to 2018, we do not see these dynamics materially changing, certainly in the first half of the year, and our pipeline of deal activity in the Business Services sector is looking extremely strong across numerous verticals. It is possible that as we approach closer to March 2019 some buyers and investors may slow down investment activity.

Business Services represents the largest part of the UK economy and is a sector in which we produce genuinely world class companies. Because of this it remains an active market for M&A, attracting interest from global strategic buyers and investors. In particular we see the following areas as likely to generate continued high levels of deal activity, buyer interest and high valuations:

  • Cyber security consulting;
  • Compliance and regulatory consulting;
  • Testing and inspection services;
  • BPO / procurement and tech-enabled services;
  • Trust and administration services; and
  • Insurance broking.

Latest Transactions

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The UK specialist lending market had a very positive start to 2017, with businesses securing good credit quality and growth strategies as a result of the continuing favourable economic conditions.
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Regulatory Driven Change: Consultancy Opportunities in the Financial Services Market

In the wake of the global financial crisis, financial services markets have undergone an extended period of dramatic transformation, as complex regulatory and compliance requirements continue to come into force.
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In the Press

Takeover Code: UK Government moves to tighten grip on takeover rules

As the UK Government moves to tighten takeover rules, Jeremy Furniss discusses the reasons behind this new bid to control M&A activity in The Telegraph.
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Outsourced building services market; Structural cause to remain optimistic about this vital UK services sector

Livingstone's Jeremy Furniss goes head-to-head with City A.M.'s Dr. Victoria Bateman to debate whether "the weaker than expected PMI figures signal that UK services are on a cliff edge?"
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The UK’s facilities management sector proves a magnet for foreign investors

For many years, the UK has led the facilities management world in the development and adoption of effective service delivery models and best practice. Livingstone's Jeremy Furniss comments for FM World.
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Contact us

Jeremy Furniss

D: +44 (0)20 7484 4703
E: furniss@livingstonepartners.co.uk

Alex John

D: +44 (0)20 7484 4712
E: john@livingstonepartners.co.uk