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Nicole Kiriakopoulos

E: nicolek@pcecompanies.com

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Industry Trends

IT Services Surge Amid Digital Transformation

The IT Professional Services Market is projected to grow by $461.6 billion from 2022 to 2027, with a CAGR of 9.1%, driven by the prevailing trend of digital transformation. While IT professional services are crucial for facilitating this shift towards digital adoption, which includes optimizing operations and leveraging data-driven insights, a major challenge is the shortage of skilled IT professionals, particularly in cybersecurity, data analytics, and AI. This underscores the growing demand for IT services during this transformation trend.1

Business Services M&A Trends Amid Economic Challenges

The Business Services sector remains resilient amid economic challenges, with a notable increase of 20% in completed deals compared to the prior year. Subsectors like human capital businesses, facilities management, and professional services continue to attract M&A interest due to their stability and growth potential. Buyers focus on target business resilience, while sellers aim to move up the value chain by expanding into technology services and subscriptions. Despite economic uncertainties, the Business Services sector demonstrates robust M&A activity.2

E-waste Disposal Market, Transforming the Waste Services Industry

The E-waste Disposal Market is poised for remarkable growth, with an expected increase in revenue from $15 million to nearly $40 million during the 2023-2030 forecast period. The rising demand for E-waste Disposal drives this growth. This market segment has the potential to provide new revenue streams for waste management if it can adapt its services and infrastructure to accommodate the rising demand.3

Digital Transformation Vital for Advertising Firms in Streaming Age

Connected TV (CTV) is expected to see a 21% increase in ad spending in 2023, having accounted for 18% of video ad expenditure in 2022. While opportunities arise due to streaming companies shifting to an average revenue per user model, large tech firms are streamlining ad space purchases. Agencies need digital transformation to meet client demands for one-stop-shop services to stay competitive.4

Cybersecurity Budgets Boost Business Services

In 2022-2023, cybersecurity budgets in the business services industry grew by 6%, with a noteworthy 11.6% share of overall IT budgets. This indicates a growing commitment to security. However, the modest budget increase may not adequately address the sector's expanding cyber risks, emphasizing the need for strategic allocation and talent acquisition to stay competitive and secure.5

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Black Knight, Inc.
  • Intercontinental Exchange, Inc.
  • $14,885.78
  • Univar Solutions Inc.
  • Apollo Global Management, Inc.; Abu Dhabi Investment Authority
  • $8,519.50
  • Diversey Holdings, Ltd.
  • Solenis LLC
  • $4,721.15
  • Focus Financial Partners Inc.
  • Clayton, Dubilier & Rice, LLC; Stone Point Capital LLC
  • $4,164.58
  • Meltwater N.V.
  • Altor Equity Partners AB; Marlin Equity Partners, LLC
  • $686.70
  • Sound Point Luna LLC
  • Sound Point Capital Management, LP
  • $428.50
  • Charah Solutions, Inc.
  • SER Capital Partners
  • $343.25
  • The Community Financial Corporation
  • Shore Bancshares, Inc.
  • $253.68
  • Salisbury Bancorp, Inc.
  • NBT Bancorp Inc.
  • $199.38
  • Varagon Capital Partners
  • Man Group Plc
  • $183.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • MacroCap Labs Inc
  • Peninsula Capital Partners, L.L.C.; A111 Capital
  • n/a
  • WSB & Associates, Inc.
  • GHK Capital Partners LP
  • n/a
  • Juniper Landscape Company
  • Verde Equity Partners LP
  • n/a
  • The Kleinfelder Group, Inc.
  • Lindsay Goldberg LLC
  • n/a
  • BLDI, LLC
  • Waséyabek Development Company, LLC
  • n/a
  • Foundation Source Philanthropic Services Inc.
  • GTCR LLC
  • n/a
  • Family Capital Strategy, LLC
  • Greycourt & Co., Inc.
  • n/a
  • Knexus Research Corporation
  • Lurie Investment Fund, LLC
  • n/a
  • American Landscaping Partners LLC
  • Shoreline Equity Partners, LLC
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Eversurance, LLC
  • MyPlanAdvocate Insurance Solutions, Inc.
  • $13.20
  • SteriQual, Inc.
  • Cal Opex Limited
  • $4.25
  • American Seating Company Inc.
  • Hewitt Outsourcing Services India, Ltd.
  • $3.19
  • Salelytics, LLC
  • MarketSource Inc.
  • n/a
  • JM Zoning/Project Expediters Consulting Corp.
  • Milrose Consultants, LLC
  • n/a
  • Esquire Assist, Ltd./AAAgent Services, LLC
  • Registered Agent Solutions, Inc.
  • n/a
  • Riser Data Inc.
  • Alchemy Insights, Inc.
  • n/a
  • IN-Line Consulting, LLC
  • YOUNG & Associates
  • n/a
  • Cardinal Services, Inc.
  • Surestaff, LLC
  • n/a
  • ASQ Consulting Group LLC
  • HKA Global Limited
  • n/a

 

Source S&P Capital IQ as of 10/11/2023 and PCE Proprietary Data

PCE Transactions

Contacts

Nicole Kiriakopoulos

Chicago Office

224-520-1068 |

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Michael Rosendahl

New York Office

201-444-6280 Ext 1 |

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Joe Anto

New York Office

407-621-2141 |

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Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. 1. Technavio. “IT Professional Services Market to Grow by USD 461.56 Billion between 2022 - 2027|the Increase in Digital Transformation Drives Market Growth - Technavio.” Yahoo Finance, 16 September 2023.
  2. 2. Castledine, L. “M&A Trends in the Business Services Sector.” RSM Global, 21 September 2023.
  3. 3. Verified Market Reports. “Global E-waste Disposal Market By Type (ICT Equipment, Home Appliances), By Application (Material Recycling, Components Recycling), By Geographic Scope And Forecast.” Verified Market Reports, July 2023.
  4. 4. Bilotta, T. “Advertising firms must embrace digital transformation to keep up.” RSM Global, 9 August 2023.
  5. 5. IANS Research. “New Research from IANS and Artico Search Reveals Cybersecurity Budgets Increased Just 6% for 2022-2023 Cycle.” PR Newswire, 26 September 2023.
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