Next year is shaping up to be a very strong year for M&A activity in the Knowledge Economy. In order to assist your preparation for 2021, take a look at our M&A Preview, in which we discuss the following eight key trends:
- The adoption of digital is accelerating
- Emerging technologies are being commercialised rapidly
- There is a convergence across the sector and delivery models are blending
- Private equity participation in the knowledge economy is increasing
- Next-generation technology platforms are emerging
- Vertical software solutions are playing an increasing role
- Buyers are returning to nearshore locations for access to new skills
- Shareholders are aligning expectations and addressing structural risks
The latest quarterly market update from global consulting & IT services M&A specialist Equiteq shows that Q3 2017 consulting deal activity rose 1% year-on-year compared to the previous quarter.
This overall trend masks large variations in deal activity amongst market segments with both Media & Marketing as well as Management Consulting experiencing the strongest M&A activity. Despite notable deals occurring in Human Resources and IT services, deal activity fell in these segments. Engineering consulting deal activity rose strongly against the prior quarter. Regionally, North America experienced strong deal flow with activity up 7% year-on-year. Deal activity in Europe stayed flat whilst the APAC & Australia region fell by 21%. However, deal volumes remain above long-term averages. Private equity activity continues to remain strong despite fierce competition and strong pricing from cash-rich strategic buyers. Accenture continued to be the most acquisitive technology buyer, acquiring 7 businesses, with notable deals in spaces like communications strategy, creative media, asset management consulting, agile software-development, cloud-based mobile, and big data and analytics. Commenting on the consulting M&A market, David Jorgenson, Equiteq’s CEO said: “We are seeing strong and accelerating activity across our global platform in North America, Europe and Asia. Current market conditions are favorable for owners of knowledge-led businesses who are investigating their strategic and liquidity opportunities." The Equiteq Consulting Share Price Index rose by over 3%, outperforming the FTSE 100 (0.8%), but underperforming the S&P 500 (4%). Human Resources and Engineering consulting segments experienced stellar performance. The Management Consulting and IT segments enjoyed modest returns, whilst the Media segment fell. ©Equiteq 2017