How Equiteq helps consulting industry buyers and investors to meet their acquisition targets
Equiteq is an M&A Advisory firm in the UK focused entirely on the Consulting sector and we only work with buyers and sellers of consulting firms.
Why is this valuable to you as a buyer?
1. Consulting sector market knowledge
We understand in detail the firms, their capabilities and the market dynamics of the consulting sector. Since 2005 we've investing heavily in researching the sector and we can give you access to:
Details of almost 2000 deals in the sector including value multiples, deal structures and economic activity
Details of 200,000 consulting firms across Europe and the USA including clients/markets served, service lines offered, financial performance and geographic coverage
A sophisticated software tool that enables your target requirements to automatically create a long list of firms for consideration. We can filter by size, geography, financial hurdles, market sectors and service lines
2. Know how to building equity value in consulting
We understand how equity value is created in a consulting firm. All Equiteq’s client-facing staff have run consulting firms from ownership/Director positions before joining Equiteq. We have turned our collective experience into an Equity Value Risk Assessment that thoroughly addresses 100 KPI’s in a consulting firm. The results from previous assessments provide a benchmark database for comparison purposes.
3. Paying the right price for the right result
We've developed our own proprietary valuation model that not only assesses the theoretical financial returns from an acquisition but also the risk of achieving those returns. The long-term financial success of any acquisition depends more on the growth achieved of the combined entity after acquisition than on the price paid at close. Whilst no-one wishes to pay more than necessary, we do understand the deal structures that promote growth and retain people assets as well as the factors that are likely to lead to a successful integration of the target firm.
4. Greater success in engaging with target firms
Successful buyers are skilled at selling the benefits of being acquired by them, rather than the many competitors currently in the market. This is not just a factor of the price offered. Being able to describe why the staff of an acquired firm will be happier, more respected, have better career prospects as well as being financial better off should be a part of the acquisition process. When we represent a buyer we put great effort into presenting these benefits to ensure that our buying client has competitive advantage. All of Equiteq's M&A staff understands the consulting sector intimately, so we are better able to represent you and the synergies between your firm and the target, than other M&A firms who are less knowledgeable of consulting.
5. A ready built pool of potential sellers
A target who has already decided to sell makes for a faster and more successful acquisition outcome. We have invested heavily in marketing to potential sellers of consulting firms in order to build a long-term pipeline of target acquisitions. We are likely to know at any point in time who is interested in selling as a result. We have over 1000 firms who are members of our Equity Club (click to see details). These are owners of consulting firms who have indicated through subscribing to the Equity Club that they are interested in selling their firm at some stage in the near future. Through our website and marketing campaigns, our pipeline of potential sellers builds daily.
There are 3 ways of engaging with our M&A services:
The passive, arms length approach!
We make contact with you once a quarter to ensure that we are aware of your current target requirements. We make sure that you are made aware of any firm that matches your current needs and who engages us with a sell brief. The advantage of this approach is that there is no cost to you other than a quarterly phone call. The disadvantage is that serendipity will determine the supply of suitable firms and of course we will be representing the seller!
A Search Assignment
We take a detailed brief from you regarding a specific target acquisition. You define size (revenue, # of consultants etc), financial hurdles (EBIT %, GM %, growth % etc), market sector focus (even specific clients if important), service line capability, geographic coverage and any other search criteria. We use our database of consulting firms, our research capability and our synergy matching software to create a long list of typically 20 – 30 firms that match your search criteria. We prepare a 2-page report for each firm based on publicly-available data and information in our database. We prioritise that list based on further discussion with you to create a short-list of typically 5 firms that we would recommend you contact to initiate an acquisition discussion. The benefit of this approach is that you gain access to our search capability for a modest cost. If you have ready access to capable internal Corporate Development resources then this might be the right approach for you.
Full Service Acquisition Engagement
We complete the above search assignment and produce the short-list of targets. We make telephone contact with each target CEO and assess their initial interest to have a discussion. We provide a pre-prepared document on you and manage the signing of an NDA. We then do all the initial performance analysis and benchmarking of the target prior to presenting the firm to you to meet the management team and assess their suitability for acquisition. We facilitate the meetings between you and the targets and then prepare the business case for the chosen target, based on your investment return criteria, for presentation to your investment board. On agreement to proceed to offer, we negotiate on your behalf the size and structure of the deal. Depending on the availability of internal or already-contracted legal and financial resources, we would then project-manage the deal through to completion. Our role during due diligence would be to conduct market and operational due diligence ourselves and work with third parties on legal/financial DD. We also advise on integration issues and conduct a post-investment audit.
The main benefits of this service are:
Minimising the risk of realizing the benefits of acquisition through access to our 100 point risk assessment benchmark database
Reduced deal price through the use of our deals database and valuation model to improve your negotiating position
Increased deal close rate through access to skilled ‘director-level’ consultants to project-manage the deal process and ‘lean M&A’ tools/processes to ensure delivery.
If you would like to discuss your situation with us and find out if we can help you, please call Tony Rice on +44 (0)1252 724264 or email tony.rice@equiteq.com more...
