The Management Consulting Global M&A Report 2018

Transcription

1 The Management Consulting Global M&A Report 2018 Market trends and key transactional insights for owners of management consulting firms. Media Agencies Management Consulting Human Resources IT Services Engineering Consulting Growing equity, realizing value Equiteq Advisors Ltd. 2018

2 Nigel Povah, Behavioural assessment & development consulting. Sold.

3 Contents Foreword 4 Management Consulting 7 Key findings 7 Overview of M&A activity 8 Regional review 11 Overview of equity market performance 12 Valuation multiples and trends 13 Strategic and private equity buyer trends 15 Selected transactions 16 Tips 19 Appendix 22 Key definitions 22 A quick word on the data 23 About Equiteq 23 Further resources 24 Disclaimer 25 Equiteq Advisors Ltd Contents 3

4 Foreword We are pleased to present our annual review of M&A and equity market trends within the management consulting sector. This report considers the deal activity trends across the global management consulting industry in We also provide a comprehensive analysis of the Equiteq Management Consulting Share Price Index, the only published stock price index for the industry. As the industry transforms, there is a unique opportunity for pioneering business owners and entrepreneurs to create value and make profitable exits within the disruption zone of the market. We hope that this latest edition of The Management Consulting Global M&A Report gives you a taste of Equiteq s unparalleled insights into deal activity within the industry. If you would like to have a chat about your current sale journey as a business owner or acquisition strategy as an acquirer, please get in touch. M&A activity rose against a backdrop of strong global economic growth, major political events in the US and Europe, and continued advancements from new digital technologies. This year saw further transformation of traditional business models underpinned by advancements in artificial intelligence and data analytics. Traditional management consulting firms now need a new array of creative, technical and management skills, which is leading to fierce competition in a talent war with adjacent knowledge-intensive services industries and corporate entities. The strong demand for limited skilled talent in hot disruptive spaces is one of the major drivers of strategic M&A and premium valuations across the knowledge economy. Strong pricing and competition for assets is also being supported by rising valuations of a number of listed serial acquirers of consulting firms, along with these cash-rich buyers desire for new avenues of growth in rapidly changing market segments. David Jorgenson, CEO Equiteq The management consulting industry continues to converge with adjacent knowledge-intensive services industries, as well as with the software sector. This can be seen through landmark crossindustry deals, as well as major restructuring and rebranding initiatives by the major players to better organize and articulate the broader set of solutions that they now offer. 4 Foreword The Management Consulting Global M&A Report 2018

5 Antonio Bonet, International development consulting. Sold. Equiteq Advisors Ltd. 2018

6 Bob Hendicott, Management consulting. Sold. 6 Segment Review The Management Consulting Global M&A Report 2018

7 Management Consulting Key findings M&A activity 5 % Annual increase in deal volumes 1.1x 11.6x 10.0x 1.0x 8 % Annual decrease in share-price index Deal volumes EBITDA multiple Revenue multiple Profiled active buyers: The Hackett Group Huron CBIZ McKinsey & Co. Ernst & Young 863 deals $100 m Average deal size $19 m Median deal value Share price performance 1.2x 9.0x Jan 2008: x 1.0x Dec 2017: 92 6 % Financial buyers 36 % Serial buyers Share price index EBITDA multiple Revenue multiple 24 % Cross-border transactions Equiteq Advisors Ltd Management Consulting 7

8 Overview of M&A activity Global political events continue to present opportunities and challenges 2017 saw the formal commencement of the UK s Brexit negotiations with the EU and a major government transition in the US, as well as important elections across Europe. These events have created demand for relevant strategy, regulatory, organizational redesign and workforce management consulting services. Private equity (PE) buyer Permira s acquisition of corporate finance adviser Duff & Phelps was a major buyout of a firm expected to capitalize on growing US demand for advisory services related to regulatory pressure on corporate practices. These practices are expected to be disrupted further from regulatory overhauls under the new administration. Leading consultancies benefit from advising on issues related to Brexit Since its creation, the Department for Exiting the EU has worked with various consultancies, including the Big Four, McKinsey, BCG and Accenture. It was reported that McKinsey was awarded a contract worth 1.5m to organize over 700 government plans relating to Brexit. In the UK, we advised project and programme manager P2 Consulting on their sale to PE buyer Lonsdale Capital Partners. P2 is well positioned to take advantage of increasing demand from governmental, regulatory, market and business change, as well as Brexit. Strong demand for strategy and analytics capabilities for healthcare clients Advisory services to the healthcare sector is a space with notable buyer interest. In the US, management consultants are benefiting from regulatory changes that are disrupting life science, payers and providers. This is driving investments in digital technologies, including predictive data analytics solutions, that enhance services and reduce costs. A major related deal was by UnitedHealth s Optum. It acquired Advisory Board s healthcare business, in a deal that split the consulting firm s healthcare business from its education unit. Optum and Advisory Board have developed expertise in transitioning clients to value-based care models. Optum s technologies and data analytics tools are expected to enhance the Advisory Board s tools and research services. Huron s acquisition of UK-based Pope Woodhead was another notable deal focused on the high-growth area of strategic consulting to life-sciences companies. Clients in this space are under pressure to defend the value of their innovations. 8 Management Consulting The Management Consulting Global M&A Report 2018

9 Notable interest in firms advising on disruption to the financial services industry Despite low interest rates and tight profit margins, financial services institutions are continuing to invest in risk & regulatory consulting and disruptive technologies. These latter investments are often being made with the aim of protecting against the competitive threat from innovative fintech start-ups and challenger banks. Financial buyer Clayton Dubilier & Rice (CD&R) acquired a majority stake in UK-based Capco from FIS. This was a major cross-border PE deal in the consulting to the financial services space. With CD&R s backing, Capco will be investing in new business consulting and digital capabilities to help financial services clients transform their businesses. Over the year there was a notable rise in interest in cryptocurrencies and blockchain technology. Many consultants reported facing a talent shortage as they looked to expand in this promising area. Accenture acquired First Annapolis, a payment consulting firm with expertise in emerging technologies like blockchain and mobile wallets. Advancements in robotics has the potential to disrupt major players The leading management consulting players continue to invest organically and via acquisition in new digital capabilities. In 2017, the digital trend that appeared to be of increasing interest among prolific buyers of consulting firms was robotics and artificial intelligence (AI). This interest was from the perspective of developing associated consulting capabilities and in using AI tools to enhance existing service offerings. In the first half of the year, The Hackett Group acquired Aecus, a European consultancy that helps clients optimize BPO, IT outsourcing and robotic process automation (RPA) through benchmarking and implementation consulting. Hackett highlighted that improving its ability to support clients efforts in RPA was an important element of the deal. McKinsey invested in the latest round of funding for its partner Afiniti, which uses AI to help companies more efficiently link their sales personnel with customers. In North America, Deloitte announced plans to launch Auvenir Audit Smarter platform, which leverages AI to assist with audit work. We expect 2018 to be another year of exciting developments for major players within the management consulting industry. Interesting niche and adjacent acquisitions will continue to be a key component of these strategic shifts across major players in the industry. The rapid industry developments underpinning deal flow are combined with a solid global economic outlook for 2018 across most developed economies. Equiteq Advisors Ltd Management Consulting 9

10 Figure 1 Management consulting M&A activity, annually (2008 to 2017) 1,200 Number of deals 1, Note: Bubble size reflects comparative average deal size for the respective year. The optimum size of a transaction will vary among buyers and the specific opportunity that they are considering. See Tip 1 in the back of the report for our perspectives on the relationship between business size and acquisition appetite. In addition to running a competitive well-negotiated sale process, there are plenty of steps that owners can take to reduce risk in the eyes of a buyer which can make a material difference to their target deal structures. See Tip 2 in the back for our perspectives on the factors that influence deal structures. Industry trends Areas of industry convergence IT services Management consulting Media agencies Management consulting HR consulting Digital transformation consulting Organizational redesign Hot spaces Digital consulting Advanced data analytics Risk & regulatory consulting Financial services consulting Artificial intelligence & robotics Healthcare consulting Buyers in adjacent industries may be willing to pay a strategic premium for an acquisition that enables expansion into a new space. See Tip 3 in the back for our perspectives on how to consider buyers across adjacent industries. 10 Management Consulting The Management Consulting Global M&A Report 2018

11 Regional review M&A activity accelerated in Europe, while growth was maintained in North America. Cross-border deal activity remained strong. High-profile cross-border acquisitions across the knowledge economy are common and enable foreign buyers to penetrate new markets, gain new clients and grow revenues with existing global accounts. See Tip 4 in the back for our perspectives on incorporating international buyers into your sale process. Figure 2 Regional M&A review North America 415 deals (up 5%) $53.8m Deal size Revenue multiple: 1.5x EBITDA multiple: 12.8x % Cross-border deals: 16% 322 deals (up 14%) Europe $11.2m Deal size Revenue multiple: 1.0x EBITDA multiple: 11.6x % Cross-border deals: 31% Asia Pacific (excl. Australia & NZ) 62 deals (down 10%) $8.1m Deal size Revenue multiple: 0.8x EBITDA multiple: 6.0x % Cross-border deals: 26% 48 % 37 % 7 % Rest of the World 30 deals (down 29%) $86.1m Deal size 4 % Australia & NZ 34 deals (down 15%) $22.3m Deal size 4 % Revenue multiple: 0.4x EBITDA multiple: N/A Revenue multiple: 0.5x EBITDA multiple: N/A % Cross-border deals: 43% % Cross-border deals: 31% Cross-border deals accounted for 24% of all deals Note: Deal sizes and valuation multiples are median figures for the respective region. Equiteq Advisors Ltd Management Consulting 11

12 Overview of equity market performance The Equiteq Management Consulting Share Price Index contracted after a strong prior year. Figure 3 Equiteq Management Consulting Share Price Index A B C D Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Management Consulting S&P 500 A. May 7: Estimations of the result of the French Presidential Election second round announced. B. Jun 8: UK General Election ends in hung parliament. C. Sep 24: Angela Merkel wins fourth term in German elections. D. Dec 19: Congress approves Republican tax plan in the US. Figure 4 Equiteq Management Consulting Share Price Index (2008 to 2017) Global financial crisis European debt crisis volatility Jan 08 May Sep Jan 09 May Sep Jan 10 May Sep Jan 11 May Sep Jan 12 May Sep Jan 13 May Sep Jan 14 May Sep Jan 15 May Sep Jan 16 May Sep Jan 17 May Sep Jan 18 Management Consulting S&P 500 Note: The Equiteq Management Consulting Share Price Index is the only published share price index which tracks the listed companies within the management consulting industry. You will be able to receive further information on the index and its performance by joining Equiteq Edge at equiteq.com/equiteq-edge. The index is continually revised to consider new listed companies and to remove businesses that are no longer relevant in each quarter. 12 Management Consulting The Management Consulting Global M&A Report 2018

13 Valuation multiples and trends Valuation multiples for both M&A transactions and publicly traded companies are strong. When reviewing this section, please note the issues of interpretation, along with the wide range of company and deal specific factors that influence the valuation of a knowledge-intensive services business. The figures in this report are primarily a comparative guide and should not be used by sellers or buyers to value a business, for which we recommend you obtain independent financial advice. See Tip 5 in the back on the key considerations when interpreting valuation metrics. Figure 5 Enterprise Value (EV) as a multiple of Last Full Year (LFY) unadjusted revenue and EBITDA Q1 Q3 Q1 Q3 0.8x 1.0x 2.4x 8.6x 11.6x 15.3x 0.6x 1.0x 1.3x 10.7x 11.4x 11.9x LFY Revenue (x) LFY EBITDA (x) M&A transactions Listed consultants Interquartile range Median Note: The interquartile range is a measure of variability, based on showing the range of data in ascending order from the 25th percentile (Q1, 1st quartile) result to the 75th percentile (Q3, 3rd quartile) result. As their quoted valuation metrics and cash balances rise, so does competition for assets from listed buyers, who are looking for new avenues of growth and are able to make earnings accretive acquisitions by paying a discount to their premium earnings ratio. See Tip 6 in the back for our perspectives on what rising share prices implies for listed buyers. Equiteq Advisors Ltd Management Consulting 13

14 Figure 6 Valuation metrics, 2008 to 2017 (M&A transactions) LFY EBITDA multiple (x) LFY Revenue multiple (x) EBITDA multiple (LHS) Revenue multiple (RHS) Note: Multiples represent the moving average over the last four quarters. Figure 7 Valuation metrics, 2008 to 2017 (listed companies) LFY EBITDA multiple (x) LFY Revenue multiple (x) EBITDA multiple (LHS) Revenue multiple (RHS) 14 Management Consulting The Management Consulting Global M&A Report 2018

15 Strategic and private equity buyer trends Management consultants with growing digital offerings dominated the list of serial buyers in the industry. 36% of all deals were by serial buyers (down from 40% in 2016). 24% of all deals were by listed buyers (up from 22% in 2016). 6% of buyers were financial buyers (down from 7% in 2016). Selected serial strategic buyers The Hackett Group The listed consulting buyer is strategically focusing its business on emerging cloud applications, RPA, enterprise analytics and what it calls Intellectual Property as a Service. As part of its expansion in these areas, it acquired two businesses at the intersection of business and technology consulting. In addition to its acquisition of Aecus, the acquirer purchased Jibe Consulting, an implementer of Oracle ERP and HCM solutions. Huron Despite its volatile share price performance, Huron continued its acquisition streak in In its third quarter financial results, the buyer announced increasing demand for its healthcare offerings, particularly its performance improvement solution. In the UK, it acquired Pope Woodhead & Associates, a provider of market access capabilities to assist life sciences clients. The firm also acquired Innosight Consulting, a growth strategy firm focused on assisting clients with disruptive change and enabling innovation. CBIZ CBIZ announced strong financial results and achieved solid share price performance throughout the year. The buyer continued its acquisitive streak with a number of reported acquisitions. This included its acquisition of CMF Associates, as well as two acquisitions adjacent to its core accounting services. As part of its third quarter results, the buyer indicated a desire for further M&A focused on expanding its core services in high growth industries. McKinsey & Co. McKinsey made two acquisitions in 2017, which was in line with its deal flow for In April, the firm acquired Elixir Management Consultancy expanding its operations in Saudi Arabia. This was followed with an acquisition of Malaysian digital engineering and design services consultancy VLT Labs by its Digital Labs business. The acquirer also made a growth investment in applied AI and advanced analytics partner Afiniti. Ernst & Young As part of its FY17 global annual review, EY announced that it made 13 strategic acquisitions expanding its capabilities in areas like RPA, digital, cyber, analytics, supply chain and strategy. The Big Four buyer also announced 6 new global alliances to meet demand for niche capabilities. This deal flow combined with strong organic growth supported the expansion of its global advisory business, which saw revenues increase over 10% during the year. Equiteq Advisors Ltd Management Consulting 15

16 Selected transactions Q1 Target: C1 Consulting Life sciences strategy consulting Buyer: Charles River Associates Deal value: $16.2m Target: RAS & Associates Strategy, operations and business process optimization Buyer: Perficient Deal value: $10.9m (1.2x LFY revenue) Target: Innosight Growth strategy consulting Buyer: Huron Deal value: $135m Target: Pope Woodhead Life sciences strategy consulting Buyer: Huron Equiteq advised Target: McKinney Rogers Strategy-through-implementation results driven consulting Buyer: GP Strategies Target: First Annapolis Consulting Consulting and digital capabilities in the payments sector Buyer: Accenture Q2 Target: Elixir Management Consultancy Management consulting Buyer: McKinsey & Co. Target: Capco Financial services consulting Buyer: Clayton Dubilier & Rice Deal value: $477m Equiteq advised Equiteq advised Target: Aecus BPO, ITO and RPA consulting Buyer: The Hackett Group Target: Jibe Consulting Business consulting and Oracle implementation Buyer: The Hackett Group Target: CMF Associates Private equity consulting Buyer: CBIZ Note: Deals shown in the quarter that they were announced. Some transaction details rely on third party information sources that have not been verified. LFY = Last Full Year. 16 Management Consulting The Management Consulting Global M&A Report 2018

17 Q3 Target: MAYA Design Digital design and innovation lab Q4 Buyer: Boston Consulting Group Target: The Advisory Board (Education) Education research, technology and consulting Buyer: Vista Equity Partners Deal value: $1.6bn Target: Etventure Digital consulting Buyer: Ernst & Young Equiteq advised Target: GNC Group Consulting Retail and consumer product focused management consulting Buyer: Grant Thornton Australia Target: The Advisory Board (Healthcare) Healthcare research, technology and consulting Buyer: Optum Deal value: $1.3bn (1.7x LFY revenue) Target: OC&C Strategy Consultants (France) Strategy consulting Buyer: EY-Parthenon (Ernst & Young) Equiteq advised Target: Certeco Business change advisory Buyer: P2 Consulting Target: The Townsend Group Investment management and advisory primarily focused on real estate and real assets Buyer: Aon Deal value: $475m Target: Quorum Consulting Commercial readiness, reimbursement strategy and market access to life sciences Buyer: Navigant Equiteq advised Target: Duff & Phelps Valuation and corporate finance advisor Buyer: Permira Deal value: $1.75bn (2.5x LFY revenue) Target: ShiftIN Strategy consulting Buyer: Sia Partners Equiteq advised Target: Nyras Aviation consulting Buyer: PA Consulting Target: The Biotech Quality Group Performance management and regulatory compliance for life sciences Buyer: Assystem Equiteq Advisors Ltd Management Consulting 17

18 John Sandom, Brand agency. Sold. 18 Management Consulting The Management Consulting Global M&A Report 2018

19 Tips The following tips relate to some of the strategic issues that business owners on a sale journey should consider while reviewing the data analysis and findings within the report. Tip 1: The relationship between business size and acquisition appetite Although landmark deals grab headlines, there is notable deal flow at smaller transaction sizes, as highlighted by the large difference between mean and median deal sizes across segments each year. Nevertheless, we typically find that serial buyers do not focus on smaller deals below certain revenue thresholds, unless they offer exceptional synergy or intellectual property or are part of a team hire with limited cash consideration being paid. Buyers may also pay a premium for larger businesses with an established brand, attractive client relationships, embedded intellectual property and the investment in infrastructure that will enable future growth. The importance of revenue size to many buyers, highlights the benefits of setting a clear growth plan and a target scale at exit. Tip 2: The factors that can influence a deal structure A knowledge-intensive services acquisition can be structured in a variety of ways, but typically involves some mixture of upfront cash element, fixed deferred cash and an earn-out. The earn-out typically lasts 2 to 4 years and offers additional compensation in the future if the business achieves certain financial goals. There are many factors which influence deal structure, however those features which tend to drive more significant earn-out elements include: Owners desire to share in synergy benefit and access to the buyers clients; Buyer s perceived risk of acquisition, including dependency on the owner and ability to retain talent, which are often higher risks for smaller companies; Nature of the buyer; Nature of the sale process; and Owner awareness and ability to negotiate on deal structuring options. There are a variety of steps that owners can take to reduce transaction risk for a buyer, which can improve target deal structures. Furthermore, we find that deal structures can be improved upon in well-managed competitive negotiations. Tip 3: Considering buyers across adjacent industries Convergence is a continuing trend in both operational and M&A growth for large players across the knowledge economy. Buyers in adjacent segments are often willing to pay premium prices that reflect the considerable synergy opportunity of cross-selling a broader set of complementary services among existing and new clients. Sellers should be aware that the highest price could therefore come from a strategic buyer outside of your core industry. Considering appropriate buyers across adjacent segments and appropriately positioning the synergy opportunity with these buyers is crucial to effectively managing a broad sale process. Tip 4: Considering international buyers Acquiring in desirable regions enables strategic buyers to gain quick access to lucrative markets, brands, intellectual property, local market knowledge, new clients and specific local expertise. As a result of this, overseas buyers may pay a premium to gain a market foothold. It is therefore important to consider a range of appropriate international buyers in a broad sale process. To attract these buyers to the local market, it is important to demonstrate the attractiveness of the market and its position. It is also key to articulate why the acquisition will be less risky and deliver a faster return than opening an office and recruiting local talent. Equiteq Advisors Ltd Tips 19

20 Tip 5: Key considerations when interpreting valuation metrics The typical metrics used by a buyer to value a knowledge-intensive services business are Enterprise Value (EV) as a multiple of a seller s last full year (LFY) of revenue and EV as a multiple of a seller s LFY of EBITDA (referred to as valuation multiples ). A buyer will typically consider reported valuation multiples on comparable M&A transactions, although only a small proportion of deals in the knowledge economy report revenue multiples and an even lower proportion report EBITDA multiples. On larger transactions, buyers may also consider the valuation multiples of large global listed companies that are tracked within the Equiteq Knowledge Economy Share Price Index. Their valuation multiples are quoted publicly on a stock exchange at a given point in time and are therefore useful benchmarks of valuation based on current market sentiment. It should be noted that to directly compare publicly quoted valuation multiples with transaction multiples requires the application of a strategic control premium and a liquidity discount, which can vary between company and equity market. Furthermore, valuation multiples for both transactions and listed companies typically relate to historic unadjusted financials. These issues with interpretation are compounded for EBITDA valuation metrics, where companies may under-report profits and not account for adjustments with respect to one-off items and equity components within salary expenses. These variables can contrive to increase a reported unadjusted EBITDA multiple figure. Given these issues of interpretation, along with the wide range of company and deal specific factors that influence the valuation of a knowledge-intensive services business, valuation multiples will vary widely. The figures in this report are therefore primarily a comparative guide and to show trends year on year. They should not be used by sellers or buyers to value a business, for which we recommend you obtain independent financial advice. Tip 6: What rising share prices means for listed buyers As the publicly quoted valuation multiples and cash balances of listed buyers rise, so does competition for assets from this buyer group. Listed companies that are growing will be looking for new avenues of growth to meet shareholder expectations, and acquisitions quickly enables them to achieve this. achieved by paying a forward EBITDA multiple that is at a discount to a buyer s own quoted EBITDA ratio. Therefore, premium and rising publicly quoted earnings ratios offers a buyer more scope to make earnings accretive acquisitions at higher prices. With respect to deal structuring, some of these buyers will also be able to offer equity components to target companies. Listed equity is increasingly valuable as share prices rise and can be used to create more compelling offers over private acquirers. Tip 7: Key considerations when selling to an accounting firm Professional services buyers are looking to further expand their Channel 2 (non-assurance) advisory services, which are considered a high growth segment for this buyer group and offers significant cross-selling opportunities with their assurance / tax client base. This buyer group is acquisitive and transaction structures typically involve non-cash components such as partnership in the accounting network. Buyers tend to operate on a territory model so have an aversion to acquiring diversely spread multi-territory businesses. Tip 8: Key considerations when selling to a private equity firm Private equity (PE) buyers differ from strategic buyers, in that the former acquire strictly to realize a cash return on their invested equity, usually after 3 to 5 years. Strategic buyers typically acquire to realize long-term strategic value. As a result, PE buyers will look for specific traits in an acquisition and selling to a PE buyer will have different implications as compared with selling to a trade buyer. To make a return on their invested equity, PE buyers look for a company that has value enhancement potential and acquire it at a favorable price with financing. With knowledge-intensive services businesses, they are attracted by the relatively high profit margins compared to other industries, high levels of profit to cash conversion, the potential for high growth if a business is in a hot sector and the barriers to entry that can be maintained if proprietary expertise is retained and leveraged through intellectual property. Earnings per share is a key metric that is tracked by public company shareholders to consider the dividend potential of the business. Earnings accretive acquisitions are often a key target of listed businesses. An accretive acquisition will increase a listed buyer s earnings per share and can be quickly 20 Tips The Management Consulting Global M&A Report 2018

21 Marc Jantzen, Performance Improvement. Sold. Equiteq Advisors Ltd. 2018

22 Appendix Key definitions Equiteq segments the knowledge economy into five key segments, which span a broad array of knowledge-intensive services. These sub-sectors are defined further below: Management consulting Firms engaged in strategic or operationally focused business advisory services. IT services Firms focused on IT architecture or strategy, IT implementation and maintenance. Media agencies Firms in this space cover all the main disciplines relating to the advertising and marketing process. Engineering consulting Firms involved in professional services relating to engineering and construction. Human resources Firms engaged in human capital management or related technology consulting, employee benefit services, leadership consulting, training and recruitment. For the purposes of this report we have broken down buyers into four groups, defined further below: Private equity or financial buyers are investment firms investing private capital into businesses, which are typically held and exited after a hold-period. Strategic or corporate buyers are non-private equity investors who have existing businesses which will typically make acquisitions that form part of their existing operations. Serial buyers are those buyers that have made multiple acquisitions over the last three years. Listed buyers are those buyers whose equity is publicly traded on a stock exchange. 22 Appendix The Management Consulting Global M&A Report 2018

23 A quick word on the data This report has been compiled through the utilization of multiple data sources including proprietary news feeds, various third-party information sources, and data services. Additionally, our daily activities in the M&A marketplace with buyers and sellers provide unique insights as to emerging trends and informs our research report s point of view. It is important to note that financial data, including transaction valuation multiples, are derived from various sources including S&P Capital IQ and PitchBook information databases, combined with our daily activities in the market with buyers and sellers that we utilize on an anonymized basis. M&A volumes (the number of transactions completed) for the current year being analyzed are estimated based on actual deal volumes and the application of an adjustment factor to account for transactions announced, but not immediately captured in our databases. Due to refinements in data and market definitions, historic figures may vary between our reports. About Equiteq Equiteq is the global leader in providing strategic advisory and Mergers and Acquisitions (M&A) services to owners of knowledge rich, often people dependent businesses. There are unique challenges to value growth and equity realization for shareholders and investors in this space. We help owners transform equity value and then realize maximum value through global sale processes. Equiteq Advisors Ltd Appendix 23

24 Further resources Join Equiteq Edge, our free source of information, advice and insight to help you prepare for sale and sell your knowledgeintensive services firm. Equiteq Edge gives you access to the findings of unique research conducted amongst buyers of knowledge-intensive services firms from around the world, insight from those who have sold their businesses and other expert advice. Join Equiteq Edge at equiteq.com/equiteq-edge Get in contact Equiteq has offices in New York, London, Singapore and Sydney. To contact us, either or call your regional office on: UK: +44 (0) North America: +1 (212) Asia-Pacific: Australia and New Zealand: Appendix The Management Consulting Global M&A Report 2018

25 Disclaimer Equiteq is an M&A and strategic advisory firm that exists to provide you, the owners of knowledgeintensive services businesses, with the best possible information, advice and experience to help you make decisions about selling your firm and preparing it for sale. What follows is a legal disclaimer to ensure that you are aware that if you act on this advice, Equiteq cannot be held liable for the results of your decisions. We have obtained the information provided in this report from sources which we believe to be reliable, and we have made reasonable efforts to ensure that it is accurate. However, the information is not intended to provide tax, legal or investment advice. We make no representations or warranties in regard to the contents of or materials provided in this report, and exclude all representations, conditions and warranties, express or implied arising by operation of law or otherwise, to the extent that these may not be excluded by law. We shall not be liable in contract, tort (including negligence) or otherwise for indirect, special, incidental, punitive or consequential losses or damages, or loss of profits, revenue, goodwill or anticipated savings, or for any financial loss whatsoever, regardless of whether any such loss or damage would arise in the ordinary course of events or otherwise, or is reasonably foreseeable or is otherwise in the contemplation of the parties in connection with this report. No liability is excluded to the extent such liability may not be excluded or limited by law. Equiteq Advisors Ltd Appendix 25

26 Contact us If you would like more information on our Management Consulting Global M&A Report 2018, our company or the various services we offer please don t hesitate to get in touch. info@equiteq.com Website: equiteq.com Equiteq has global reach through its offices in New York, London, Singapore and Sydney. Equiteq Advisors Ltd Equiteq Advisors Ltd. April 2018