2016 reached a nine-year high in consulting M&A volumes, according to Equiteq’s Global Consulting Mergers & Acquisitions Report 2017. Despite deal activity falling in the quarter prior to the US Presidential election and the UK’s Brexit vote, deal volumes were up 1%.
Outperforming the S&P 500, the strength of the consulting sector was further demonstrated as the Equiteq Consulting Share Price Index ended 2016 up 14%, a 10-year high.
The top consulting segments for deal activity were the rapidly evolving
Management Consulting, IT Services and Media segments. Management Consulting saw a 2% growth in deal volumes and a huge 32% increase in the share-price index.
David Jorgenson, Equiteq CEO, commented:
‘We are seeing unprecedented diversification amongst acquirers of knowledge-led businesses such as Management Consultants, Media Agencies, IT Services, Engineering Consultants and HR Consulting. As a result this is driving convergence between consulting sectors and creating hybrid business models with creative, technology consulting and managed services. This convergence trend - driven by digital disruption, changing client demands and the search for growth - is blurring traditional boundaries.’
Regionally, 44% of all deals took place in North America, which enjoyed the highest M&A value, although Europe (38% of deals) and Asia-Pacific (9% of deals) enjoyed stronger M&A growth than North America. Deal activity was particularly robust in the UK where the number of completed transactions increased by 20% over the year.
Cross-border deal activity remained strong, highlighting the global nature of M&A activity in consulting. Despite some major political upheavals, cross-border deal activity accounted for 28% of all deal volumes, up from 27% in 2015.
Commenting on the outlook for 2017, Jorgenson continues:
‘The new year has already seen high-profile deals across segments of the consulting market, as well as strong deal activity amongst high-profile PE investors. We expect that this robust demand for M&A will continue over the next twelve months.’
The Global Consulting M&A Report 2017 is available to download for free by clicking on the links below:
Global Consulting M&A Report 2017 – all sectors
Global Management Consulting M&A Report 2017
Global IT Services M&A Report 2017
Global Media Agencies M&A Report 2017
Global Engineering Services M&A Report 2017
Global Human Resources Consulting M&A Report 2017