The CBI survey supports what the Business Services team at Alantra continue to see in the M&A market. There is strong interest in high margin, scalable professional services businesses from private equity and wider investors, especially following some recent successful exits such as Alpha FMC and Xafinity.
On top of this, professional services business models continue to evolve, putting tech-enabled services alongside traditional time and materials consulting, and also successfully developing alternative employment models such as increased use of associates or freelancers. All of these developments contribute to carving out attractive niche market positions for the leading businesses.
On the flip-side, the world is getting more complicated and we are still seeing knock on effects from the financial crisis with industries transforming structurally to readjust to lower cost, more agile models, and professional service companies are benefiting from this as clients need more help to change as they have more limited internal resources.
The uncertainty around Brexit in particular is generating opportunity for consultants and so we expect the Business Services sector to continue to grow and drive strong M&A activity in the coming year.
Demand for services such as accountancy, legal work and marketing is booming, with optimism among such companies improving at the fastest rate in more than a year, Britain’s biggest business lobby group has claimed. A quarterly survey by the CBI shows that growth in volumes for business and professional services companies jumped in the three months to May, with a balance of 25 per cent reporting a rise, the sharpest rate of growth since August 2015.