Are you scaling smart or scaling towards failure?

Confidential© Equiteq 2016 equiteq.com

Growing equity, realizing value

Are you scaling smart or scaling toward failure?

Confidential© Equiteq 2016 equiteq.com 2

Equiteq is the leading M&A firm focused exclusively on the consulting sector

What we do for our clients Global presence and consulting industry credentials

Equity value realizationSale to a Strategic Buyer or Financial Investor

Sell50+ Deals

Value creation and sale preparationBetween 1 and 5 years ahead of a desired transaction

Prepare300+

Clients

Why we’re different

• Deep domain expertise in the Consulting sector

• Add value and engage at any stage in the exit destination journey

• Unique blend of consulting, corporate finance and investment banking skills

NEW YORK

LONDON

SINGAPORE

Established in 2004 Regular AMCF USA speaker

50 people across 4 continents Regular MCA UK speaker

Clients in 27+ countries Widely published in industry media

SYDNEY


Smart Scaling is ensuring business growth translates into equity value growth by avoiding mistakes and missteps


Contents of today’s webinar

Running a growing consulting firm

Which scaling option is right for my firm?

Key Takeaways and Questions

What buyers are looking for


A successful consultancy is a growing consultancy

5

Aim to grow

What are you growing for?

Dividends or Sale

Consider what a buyer would think


What are buyers looking for?

6

Consistency and Pipeline01

Size02

Focus03

IP04


Consistency and PipelineConsistent growth and a solid pipeline build confidence and reduce perceived risk for a buyer

7

PipelineConsistency - Revenue & Profit

2013 2014 2015 2016 2017

RevenueEBITDA

How much work is ‘booked’?

Time

Significant proportion of booked work

Budget Forecast

Pipe

line

Reve

nue


SizeBuyers will consider a wide range of sizes, but on average $30m is considered the optimum size

8

Source: Equiteq – The Global Consulting Mergers and Acquisitions Report 2016

Range of consulting deal values in 2015


FocusGenerally buyers like focus in service, sector and geography to make synergy work

9

Service Focus Sector Focus Geographic Focus


IPBuyers want IP they can leverage

10

Revenue Generating

Proprietary Methodologies

Thought Leadership

Benchmarking Data


What scaling option is right for my firm?

11

Entering a new market?01

Developing IP?02

Acquisition to drive growth?03

Diversify my offering?04


Entering a new market?Can be high cost (financial and effort), but also valuable in demonstrating scalability of model

12

Simple guide to focusing your sales efforts

Current Clients

Past Clients

New Clients

Focus of Sales Efforts High ←→ Low

Understanding of Client Needs High ←→ Low

Strength of Message Stronger ←→ Weaker

Difficulty of Sale Easier ←→ Difficult

Entering a new Industry Sector

Entering a new Geographic Market

New Markets


Dri

ves

Strategy

Intellectual Property

Leverage

Developing IP?Leverageable IP aligned to your strategy is most valuable

13

Benchmarking Data

Revenue Generating

Proprietary Methodologies

Thought Leadership

Dri

ves

Resource Leverage Model


Acquisition to drive growth?Acquisition is a significant undertaking, you must be clear about the benefits and risks

14

Time

Reve

nue

Time

Reve

nue Your Firm

Target Firm

TimeRe

venu

e Your Firm + Target Firm

?

?

?

?


Diversify my offering?Wider propositions can bring additional client fees, but beware of diluting your focus

15

Services Focus

No. of Services

Focus / Expertise / Credibility


Key Takeaways

16

Smart Scaling

You can grow revenue and profits, and equity value

You need to consider how a buyer will view your firm, when making decisions today that will affect your future

Buyers like:

Firms with critical mass

Consistent performance

Focused propositions, sectors and geographies

Leverageable Intellectual Property

Confidential© Equiteq 2016 equiteq.com 17

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Are you scaling smart or scaling towards failure?