Fairgrove has done an in-depth review of private equity deals in business services, segmenting deals by area and sub-category, covering both Europe, and the UK and Ireland. Marketing and Communications, Management Consulting, Engineering Services, and Waste Management were all popular sectors, although funds have invested across a range of different areas.
Figure 1: 2021 Business Services Deals, Europe (incl. UK and Ireland)
Figure 2: 2021 Business Services Deals, UK and Ireland
Given ongoing macroeconomic uncertainty, private equity firms are increasingly attracted to the non-discretionary spend and recurring revenue models that many service lines in this sector offer. Strategies for growth are also abundant, and can include domestic and international growth, product and market extension, and implementing a national roll-up (benefiting from multiple arbitrage).
Fairgrove has worked across a number of these sectors, with a small sample of recent projects included below.
Figure 3: Selection of Fairgrove’s recent projects in Business Services
|Accounting & Tax||Dains||Horizon|
|Fire & Security||Churches Fire||n/a (refinancing)|
|Human Capital||Skills Alliance||Palatine|
|Management Consulting||Harmonic||KBR (Trade)|
|Market Intelligence||Market News International||Tenzing|
|Marketing & Communications||Fanbytes||Brainlabs1|
|Marketing & Communications||Molzi||Brainlabs1|
|Marketing & Communications||Flag||Vespa|
A key driver behind these acquisitions was technology. As technology and people businesses increasingly overlap, hybrid, tech-enabled people businesses can deliver superior and more efficient services to their customers. Services companies that have successfully transitioned to a tech-enabled model, or have built a growing, revenue generating tech-enabled business are highly sought after. Furthermore, corporates are implementing new digital ways of working, a trend accelerated by the pandemic, which has led to an increased need for data engineering and analytics, digital transformation consultancies, and digital marketing.