Professional Services Practice Overview

Introduction

Harris Williams is pleased to present our Professional Services Industry Update for September 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

Navigant in Deal to be Acquired for $1.1 Billion

Crain Communications  8/2/2019

Guidehouse has announced a deal to buy Navigant Consulting through its financial sponsor Veritas Capital. Navigant received interest from diverse group of partners  after divesting its legal dispute business in 2018.

The acquisition will reportedly further Guidehouse’s digital initiatives and diversify the primarily public sector-focused business.

Read the full article here.

Pivotal Acquisition Corp. Announces Acquisitions by KLDiscovery

Business Wire  7/29/2019

KLDiscovery (KLD), a provider of technology-enabled legal services focused on eDiscovery, has acquired Strategic Legal Solutions and Compiled. The purchases are expected to expand KLD’s capabilities and provide significant cost synergies post-integration which is a part of KLD's broader tuck-in acquisition strategy.

These acquisitions come shortly after the announced merger between KLD and Pivotal Acquisition Corp., a public special-purpose acquisition company.

Read the full article here.

Top 4 Business Process Outsourcing Trends to Expect in 2019

Forbes  7/12/2019

Business process outsourcing (BPO) companies are facing headwinds as new technologies take industry share. Automation of business process via AI and software is proving to be more cost-effective for many companies’ non-core processes. Other continuing technology trends such as the increased usage of social media, cloud computing, and Software-as-a-Service are expected to force BPO companies to adapt to the changing landscape.

Read the full article here.

Capgemini Buys Engineering Consultancy Altran for €3.6 Billion

Consultancy Europe  6/25/2019

Capgemini has announced a deal to buy Altran Technologies. After closing, Capgemini anticipates becoming the largest sector player in engineering and R&D services in the U.S. and Europe.

Both companies have been active M&A buyers in the past couple years—significantly increasing headcount.

Read the full article here.

An Industry in Transition: Legal Services “Market of the Future”

Legal Business World Publications  6/21/2019

Increasing buyer power in the legal industry is driving a big change on both sides of the market.  As customer requirements change, Alternate Legal Service Providers (ALSPs) are filling the void in current legal services customer needs. ALSPs represent a rapidly growing segment of providers, but currently represent less than 1% of the legal industry share.

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 on page 8.

Public Markets1

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Economic Trends

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M&A Market Trends

Business Services M&A Volume by Year1

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Representative Professional Services M&A Transactions by Sector (PB, CAPIQ, MM)1

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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, Total System Services

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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