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Exit and Growth Strategies for Middle Market Businesses

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M&A News In The Business Services Industry Sector

By Brad Purifoy | Aug 16, 2018

The report below gives a good overview of the third Quarter M&A activity in the Business Services Industry Sector. M&A activity for North American based target companies in the Business Services sector for Q2 2018 included 457 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was announced in June when CBRE Group Inc acquired FacilitySource LLC from Warburg Pincus LLC for US$290 million in cash. The acquisition strengthens CBRE’s ability to deliver integrated solutions for occupier clients. Founded in 2005, FacilitySource LLC is located in Columbus, Ohio and provides outsource integrated facility support services.

Strong GDP growth (4%+) has translated well into the Business Services sector. On the public markets, the sector performed strong gaining 3.9%, significantly outperforming the S&P 500’s rally of 0.6% in the same period.

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M&A News In The Business Services Industry Sector

By Brad Purifoy | May 09, 2018

The report below gives a good overview of the second Quarter M&A activity in the Business Services Industry Sector. M&A activity for North American based target companies in the Business Services sector for Q1 2018 included 897 closed deals, according to data published by industry data tracker FactSet.

One of the notable transactions of the quarter was Sentinel Capital Partners, a private equity firm that invests in companies at the lower end of the midmarket, announced the acquisition of UBEO Business Services, a provider of printer, copier and related office equipment sales and services in Texas. Terms of the deal were not disclosed. UBEO is the largest independent provider of document management equipment and related services in Texas. Through seven sales branches in the greater Austin, Dallas-Fort Worth, and Houston metropolitan areas, UBEO sells printers, copiers and other document management equipment bundled with premium maintenance contracts to mid-sized businesses, schools, municipalities and other customers.

The US business services sector generates combined annual revenue of about $1.7 trillion according to the US Census Bureau. The four largest business services segments are IT services (about 20% of industry revenue), architectural and engineering services (15%), legal services (15%), and consulting services (15%). Accounting services and scientific research each generate about 10% of revenue. Other segments include advertising and specialized design services.

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M&A News In The Business Services Industry Sector

By Brad Purifoy | Feb 28, 2018

The report below gives a good overview of the first quarter M&A activity in the Business Services Industry Sector. M&A activity for North American based target companies in the Business Services sector for Q4 2017 included 390 closed deals, according to data published by industry data tracker FactSet.
Rising awareness among executives about the negative business impact of security incidents and a need to keep up with regulatory changes is leading to an increase in global spending on information security, according to Gartner. Worldwide spending on information security products and services is forecast to grow 7% year-over-year to reach a total of about $86 billion in 2017, with such spending expected to grow to $93 billion in 2018. Spending on global cybersecurity is being driven by an increase in data breaches and a greater need for app security testing. The European Union’s General Data Protection Regulation, set to take effect in May 2018, is also sparking concern about IT security. The new rule is expected to drive 65% of data loss prevention buying decisions through 2018.

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M&A Quarterly News In The Business Services Industry Sector

By Brad Purifoy | Nov 07, 2017

The fourth quarter M&A below provides you a good overview on activities in the Business Services Industry Sector. M&A activity for North American based target companies in the Business Services sector for Q3 2017 included 172 closed deals, according to data published by industry data tracker FactSet. The average purchase price was $82 million.

The move by private equity firms into the broader professional services sector presents new competition and a potential long-term threat to consulting services firms, according to a recent blog post by Source Global Research. Private equity firms are investing in areas such as big data and analytics, digital transformation and cybersecurity, all of which are among the primary sources of growth for consulting firms.

One subsector growing considerably is cybersecurity. The U.S. Federal cybersecurity market is estimated to reach $22 Billion by 2022.

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Q3 – 2017 Business Services | M&A

By Brad Purifoy | Sep 01, 2017

M&A activity for North American based target companies in the Business Services sector for Q2 2017 included 590 closed deals, according to data published by industry data tracker FactSet.

One of the largest middle market deals of the quarter was announced in April when Belgacom International Carrier Services SA, a subsidiary of Proximus SA, ultimately owned by the Government of Belgium, entered into a definitive agreement to acquire TeleSign Corp, a portfolio company of Summit Partners LP, Adams Street Partners LLC, March Capital Partners and Telstra Ventures, for US$230 million in cash with an undisclosed amount in contingent payout. TeleSign provides internet, mobile and cloud authentication and verification services. The company was founded in 2005 and is headquartered in Marina del Rey, CA.

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Purchase Price Adjustments Can Mean Big Money

By Brad Purifoy | Apr 01, 2015

Upward Chart Money SignNo two M&A transactions are exactly alike, but one issue that will arise in almost every deal is that of a purchase price adjustment (PPA). Exactly when and why PPAs are structured, and how they measured are critical issues directly impacting how much money a seller will ultimately receive from the buyer in a transaction.

So what exactly is a purchase price adjustment, and how is it typically used in a transaction? There are many reasons they can exist, and in different forms, but in general a purchase price adjustment is used to ensure that a buyer will receive the amount of net assets that existed when the purchase price was determined and agreed to by the parties.

As background, a transaction usually comes together in stages, the first of which is when the parties agree on a basic price and deal structure (e.g. is the buyer buying assets or stock for a certain price). At this stage there is typically a term sheet or Letter of Intent (LOI) signed by the parties laying out this basic deal and some related terms and conditions. Once the LOI is signed, the buyer has an agreed upon time period to kick the tires of the business (have accountants review the books, etc.). This stage is often referred to as the Due Diligence period, and usually takes 60 to 90 days, or longer. Usually concurrently, negotiations regarding final documentations occur, third party lending arrangements and agreements are put into place, etc. And as final steps, the agreed upon documents are signed and the transaction funds. Read more »