Professional Services Practice Overview

Introduction

Harris Williams is pleased to present our Professional Services Industry Update for March 2020. This report provides commentary and analysis on current capital market trends and merger and acquisition dynamics within the global professional services industry.

We hope you find this edition helpful, and we encourage you to contact us directly if you would like to discuss our perspective on current industry trends and M&A opportunities or our relevant industry experience.

Our Practice

The Harris Williams Business Services Group has experience advising companies that provide a range of commercial, industrial and professional services. 

This particular report focuses on trends and metrics in the following areas:

  • Business Process Outsourcing
  • Consulting
  • Education & Training
  • Engineering
  • Financial Services
  • Governance,
  • Risk & Compliance
  • Human Capital Management
  • Information Technology
  • Insurance & Risk Management
  • Legal Services
  • Marketing & Information
  • Workforce Solutions

Representative B2B Professional Services Transactions

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What We’re Reading

Aon and Willis Towers Watson Say Merger Is All About ‘Getting Better, Not Bigger’

Insurance Journal  3/10/2020

“There are several talking points that are evident about the planned merger of broking giants Aon and Willis Towers Watson. First, it’s not about getting bigger; it’s about getting better. And, second, it’s about addressing unmet client needs.

But it indeed will get bigger – creating the largest international insurance broker – merging under the name Aon.

‘Our combined firm will accelerate innovation on behalf of clients and be better able to deliver more value to all stakeholders. And while we will be bigger, yes, that’s not what this transaction is about. This is about better,’ said Greg Case, chief executive officer, Aon, during an analysts’ call on March 9, the day the merger was announced.”

Read the full article here.

Private Schools Lure High-Income Families with Financial Help

WSJ  2/29/2020

“Thousands of families with annual incomes over $250,000 are seeking financial assistance to cover the mounting cost of tuition at private K-12 schools.

But some schools don’t call it financial aid. Instead, they use such terms as ‘flexible’ tuition to attract parents who might assume they earn too much to qualify for traditional aid, or balk at a perceived stigma.

Flexible tuition ‘reduces sticker shock,’ said Jeffrey Shields, president of the National Business Officers Association, which serves independent schools. ‘It’s more and more common that families are coming to the table and want to negotiate,’ he said. ‘Every family, regardless of resources, is looking for a deal.’”

Read the full article here.

Private Equity in 2019: Strong Deal Activity Despite Worsening Macro Conditions

Bain & Company  2/24/2020

“If 2018 was a year of divergence—acceleration in the US, deceleration in the eurozone and China—2019 saw economies slowing across the board. There is a growing expectation of a global recession in the near future. Beyond the trade wars and uncertainty around Brexit, a number of economic indicators are flashing red or yellow.

Some 57% of private equity fund general partners (GPs) surveyed by Preqin worldwide think the economy has reached a cyclical peak, while 14% think it has already entered a recession. They are also significantly more worried about geopolitical conditions than they were a year earlier. Overall, these concerns about market stability help explain why their No. 1 source of anxiety (70% of respondents) is overheated asset valuations.”

Read the full article here.

Four Major Trends Impacting Professional Services Firms

Consultancy Europe  2/3/2020

“The professional services industry is growing, with revenues and headcounts rising across the board. But the industry is increasingly being issued with a stark warning that cracks in its traditional model are starting to show. Four major trends that are driving change in the world of professional services.”

Read the full article here.

Public Markets1

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Notes: Data as of March 12, 2020. Comparable company sets listed below. Sub-sector indices weighted by stock price.

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Notes: Data as of March 12, 2020. Comparable company sets listed below.

Economic Trends

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M&A Market Trends1

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1. S&P Global Capital IQ
2. U.S. Bureau of Economic Analysis
3. The Conference Board
4. U.S. Bureau of Labor Statistics
5. U.S. Department of Labor
6. Institute for Supply Management
 

Public Comparable Companies:

BPO: Cognizant, Computershare, DXC, ExlService, Genpact, Sykes Enterprises, Tata Consultancy, TTEC, Wipro, and WNS
Consulting: Accenture, CBIZ, CRA International, FTI Consulting, Huron Consulting Group, ICF International, and Resources Connection
Human Capital: 51job, ASGN, Barrett Business Services, Hays, Heidrick & Struggles International, Insperity, Kelly Services, Kforce, Korn Ferry, ManpowerGroup, Randstad, Robert Half International, SThree, TrueBlue, Willis Towers Watson
IL&R Services: Aon, Arthur J. Gallagher & Co., Brown & Brown, Crawford & Company, Marsh & McLennan Companies, Willis Towers Watson
M&I Services: Alliance Data Systems, comScore, CoreLogic, CoStar Group, Equifax, Experian, FactSet, Fair Isaac, Forrester Research, IHS Markit, Informa, LiveRamp Holdings, Moody's, Morningstar, Nielsen Holdings, Omnicom Group, Publicis Groupe, The Interpublic Group of Companies, Thomson Reuters, Verisk Analytics, Viad, Wolters Kluwer, WPP
Transaction Processing: Automatic Data Processing, Fidelity National Information Services, Global Payments, Jack Henry & Associates, Paychex, The Western Union Company
Education and Training: Adtalem Global Education, American Public Education, Franklin Covey, GP Strategies, Grand Canyon Education, K12, Lincoln Educational Services, Pearson, Scholastic, Strategic Education, Zovio
 

The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.

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