Professional Services Practice Overview

Introduction

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

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 Professional Services Transactions

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What We’re Reading

Managing Cost-of-Living Differences for Pay in a Remote World

Human Resource Executive  9/3/2020

“The rise in remote jobs now enables employers to expand their reach and recruit skilled candidates from anywhere in the country. While good news, one key question has surfaced: Do salaries need to be adjusted for cost-of-living differences?

“For years, geography was among several factors that helped determine salary. But that’s changing. Some employers are basing pay mostly on the job itself, not where applicants live, and also the demand for their skills and experiences. Although this trend has been escalating in recent years, COVID-19 accelerated it.”

Read the full article here.

Compliance Expectations Amid the COVID-19 Crisis

Risk Management  9/1/2020

“The combination of intense economic pressure on employees across many industry sectors and the adjustment to a new remote work environment amid the COVID-19 pandemic has created an unprecedented opportunity for insiders to exploit new or lightly tested compliance processes.”

Read the full article here.

Three Ways COVID-19 is Accelerating Digital Transformation in Professional Services

CFO  6/29/2020

“Digital transformation was a line item on many business agendas long before COVID-19 came along. But the pandemic catapulted it to the top of the priority list for virtually every business in the world.

“The new potential for the virtual workplace is starting to sink in at the absolute highest levels of the corporate world. It will affect everything from commercial — and residential — real estate to cybersecurity planning and training to product development.”

Read the full article here.

Cybersecurity Compliance Trends in a Post-Pandemic World

Forbes  5/11/2020

“What is already happening is that regulatory bodies are relying on compliance assessors to come up with custom controls for technology environments not addressed in current regulations. That will make it even more important for businesses and organizations to select and work with the right compliance assessor, regardless of industry or framework.”

Read the full article here.

The COVID-19 Aftermath for Professional Services: Three Hypotheses

Legal Business World  3/17/2020

“The market opportunity arising from globally increasing and more complex regulation, growing uncertainty as well as general risk management needs has been transcending many clients’ management questions over the past few years – and is now, in the light of COVID-19, likely to increase even more.”

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: Data as of September 14, 2020. Sub-sector indices weighted by stock price.

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Notes: Data as of September 14, 2020.

Economic Trends

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M&A Market Trends1

Professional Services M&A Volume by Year

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Note: Data through July 14, 2020.

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