The European mergers and acquisitions market for consultancies has trebled in size since 2003, it has been claimed.
A new report entitled the ‘The European Consulting Mergers & Acquisitions Report 2007’ suggests that for owners of these businesses there has never been a better time to sell.
The report’s authors, Paul Collins and David Cheeseman, say that firms who have sales of over £3m per annum are the most likely to be made an attractive offer.
This could come from either a competitor firms or private equity investors, with the later largely responsible for the upturn in the market.
“The market has tripled in volume since 2003 and it’s largely because more private equity firms are becoming interested in buying consultancies,” Cheeseman said.
“That is because service business like consulting, if well run, have a reputation for healthy profits and a good cash flow.
“For an investor this provides an opportunity to improve the returns from their portfolio of investments.
“For the owners of consulting firms it’s a chance to sell up and enjoy some of your hard earned equity, begin a new venture, retire, or a bit of all three!”
Cheeseman says that buyers are particularly interested in the company’s business pipeline.
He also recommends that owners get their management teams ‘on to the same page’.
Finally, he repeats good advice which is applicable for any deal of this kind, regardless of sector – that the buyer is a good strategic fit.
© Crimson Business Ltd. 2007
