Professional services have remained a popular segment for acquisitions in the first half of 2019, due largely to lower barriers to entry in the sector creating a lot of opportunities for growth.
Recent data from IBISWorld reported that sole practitioners and boutique firms with less than 20 staff represented approximately 98% of professional services businesses in fields such as law, advertising, architecture, accounting, financial advice, engineering and consulting, among others.
Professional services have remained a popular segment for acquisitions in the first half of 2019, due largely to lower barriers to entry in the sector creating a lot of opportunities for growth.
Recent data from IBISWorld reported that sole practitioners and boutique firms with less than 20 staff represented approximately 98% of professional services businesses in fields such as law, advertising, architecture, accounting, financial advice, engineering and consulting, among others.
The ‘specialised’ nature of expertise offered by professional services, and revenue driven by personal client relationships and the expertise of individual employees means long term growth prospects are highly dependent on effective talent development strategies.
Faced with significant investments required to train and develop their staff has led many professional services firms to consider acquiring established companies and their networks as a lower risk, cost-effective way of increasing market share.
RPS Groups’ acquisition of Corview and its team of 45 management consultants for $32m seeks to expand the group’s delivery of consulting services, through broadened skills and enhanced knowledge of its employees. This follows its acquisitions of Manidis Roberts in 2012 and Everything Infrastructure Group in 2015. The integration of additional specialists to its Group enables the London listed company to bolster its services offering in the Australian market.
Other notable transactions in the sector in the first half of 2019 include:
- IPH Limited acquiring 19.99% and the remaining 80.01% stake in Xenith IP Group for $155m;
- People Infrastructure Limited’s $14m acquisition of Halcyon Knights; and
- People Infrastructure Limited acquiring First Choice Care and Carestaff Nursing Services Pty Ltd for $17m.
Pitcher Partners has an experienced team of specialists operating in the professional services sectors. Do not hesitate to contact us if you would like to discuss your own situation.
DFP Recruitment
M&A Advisory
Divestment to Will Group
Founded in 1981, DFP Recruitment is a provider of recruitment and staffing services across Australia. The business offers a range of recruitment solutions including temporary, permanent, graduate recruitment services, as well as and psychometric evaluations and other human resources services.
In January 2018, a subsidiary of recruitment services giant, Will Group, completed the acquisition of 60% of the shares in DFP Recruitment. Pitcher Partners Corporate Finance supported DFP throughout the sale process, acting as M&A and taxation advisor to the vendors.
The corporate finance team helped navigate both parties through a complex transaction involving a sophisticated employment compliance regime, multiple shareholding parties and earn-out considerations. The corporate finance and tax consulting teams worked seamlessly to provide tailored services to the specific needs of the transaction and the vendors.
Pitcher Partner’s professionalism, understanding of DFP’s commercial sensitivities and expertise provided DFP with confidence throughout process, and resulted in a positive outcome for all parties involved.
