Professional Services Practice Overview

Introduction

Harris Williams is pleased to present our Professional Services Industry Update for November 2019. 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 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

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

Nielsen to Separate Business into Two Public Companies

Axios  11/7/2019

The $7.5 billion data and analytics company announced the spinoff of its retail measurement business. The announcement comes after a long strategic review and recent bout of underperformance due to brick and mortar retail decline and increased competition from companies like Comscore. Although there was private equity interest in the deal, the groups couldn’t get behind the high leverage that partially drove the sale in the first place.

Read the full article here.

Apax Partners Acquires Lexitas from Trinity Hunt Partners

PR Newswire  10/5/2019

Apax Partners announced the acquisition of Lexitas, a technology-enabled litigation services provider. The CEO of Lexitas cites vast white space in the outsourced litigation services market remaining in both organic and acquisition opportunities.

Read the full article here.

Outsourcing Trends and Statistics for 2020 and Beyond

SuperStaff  10/13/2019

Businesses of all sizes can realize benefits from outsourcing. Small businesses in particular often choose to outsource business processes for a number of reasons, including efficiency, capacity, talent, etc. As digital trends like cloud computing and automation continue to gain more traction, it’s important for small businesses to asses which functions should or shouldn’t be outsourced.

Read the full article here.

What is an E-Discovery Professional?

The Balance Careers  10/7/2019

A large portion of documentation is electronic nowadays. That fact explains the burgeoning of the electronic discovery industry into an $11 billion industry in 2018. It’s predicted that the industry will grow to $17 billion by 2023.

Although the process has significantly shifted since the days of boxes of paper, it’s important to look back into how discovery traditionally worked. The history of discovery’s transition to digital provides context for how future change will compare.

Read the full article here.

Big Money is Betting on Legal Industry Transformation

Forbes  10/7/2019

Capital from new pockets has been pouring into the legal industry, where investment grew 718% last year. The story this year has been no different, and investment could possibly top $2 billion. With the legal industry still fragmented and amidst a technological transformation, it’s no surprise seeing this ramp in investing activity in the space.

Read the full article here.

The End of Staffing

Forbes  9/27/2019

With a background dating back to World War II, the staffing industry has been around for some time. Today, players in the industry are increasingly tech- and data-enabled. Regulation, workforce expectations and other catalysts will continue to drive change in the staffing industry and will leave companies that don’t adapt behind.

Read the full article here.

Public Markets1

Historical Stock Prices – Last 5 Years

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Historical Median TEV/LTM EBITDA Multiples – Last 5 Years

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Notes: Sub-sector indices weighted by stock price. Comparable company sets listed below.

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Economic Trends

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M&A Market Trends1

Business Services M&A Volume by Year

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Representative Professional Services M&A Transactions by Sector

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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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