Our Results
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Equiteq clients achieve consistently higher year-on-year revenue growth, EBIT % and higher prices on sale
Equiteq specializes in maximizing the growth in value of its clients and in delivering higher prices when the time is right to realize that value. We are able to achieve this because of our total focus on the Consulting and IT Services sector. No other firm in either M&A Advisory or Strategic Consulting could make this claim.
Since our foundation in 2005, Equiteq has worked with Consulting and IT Service clients ranging in size from £500,000 sales revenue to £500m sales revenue. Over the period 2007 to 2008 our clients have achieved an outstanding 34% average growth in sales revenue. This compares with an industry average of 6.2% (source: MCA report for 2008) over the same period.
Growth in sales is one factor contributing to value but absolute profitability expressed as Earnings Before Interest and Tax or EBIT is another important factor in the valuation of a Consulting or IT Service firm. Equiteq holds a database of 200,000 consulting firms globally. The average reported EBIT % (as a percentage of sales revenues) across that entire database is just 6%. Allowing for under-reporting of profits for good tax planning reasons would suggest a real average EBIT performance of about 10%. The average Equiteq client delivered 18.7% EBIT during the period 2007 to 2008.
Since 2007 Equiteq has been involved in managing sale transactions for our Consulting and IT Service clients. The average revenue multiple achieved for the owners of these firms has been 1.8. This is significantly higher than the industry average of 1.2 times revenue over the same period (source: The European Mergers and Acquisitions Report 2009, Equiteq LLP). This difference could make a massive impact on your personal wealth – compare the 2 figures when multiplied by your sales revenues. For example, a £5m sales revenue firm sold by Equiteq would realize £9m as compared with £6m with the average M&A firm. A £10m sales revenue firm would realize £18m with Equiteq and £12m with the average sale process – a massive £6m difference.
These differences in values achieved are due primarily to two factors:
- Strong growth using the Equiteq ‘8 Levers of Equity Value’ growth model (delivered as the Equity Growth Accelerator ) during the period these clients worked with us in the few years leading up to a sale
- Our in-depth knowledge of the Consulting and IT Services sector and the buyer market that enables us to find strong synergistic buyers and deliver premium prices
We are currently managing a number of sale and acquisition transactions for clients. See Helping Owners to grow if you would like to join our increasing list of clients who are benefiting from following our profit growth programme or see Selling Your company if you feel that you are ready to prepare for a sale of your firm, or see Acquisition Services if you would like to use our expertise to find a target acquisition.
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