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1、Professional and Tech-Enabled Services Industry Update Harris Williams|Q3 2022Professional and Tech-Enabled Services|Q3 2022What Were Reading1Recent Harris Williams Industry ContentTechnology-Enabled Business ServicesLink to Read“Accounting is attractive to PE firms for several reasons,but theyve hi
2、storically been on the outside looking in,says Christopher Geier,CEO and managing partner of Sikich LLP in Chicago.Thats partly because of the traditional accounting firm partnership structure and the fact that accounting firms doing attest work have to be majority-ownedor even entirely ownedby CPAs
3、 and cant have outside investors.”Read the full article here.The Hand of Private Equity in Accounting FirmsIllinois CPA Society“Private equity investors,he explained,are attracted to accounting firms because they believe they are low risk and recession-proof,deliver positive cash flow,and are poised
4、 for growth as the industry transitions to a more advisory-oriented service model.They believe the accounting profession is going through a major transformation.Some firms are positioned to provide the next wave of products and services and industry specialization that the middle market is demanding
5、.This will increase the price war on acquiring targeted accounting firms.”Read the full article here.As M&A Activity Reshapes the Tax&Accounting Profession,Private Equity Takes a HandReuters“Since its enactment,SOX has provided a robust framework for deterring corporate fraud,increasing transparency
6、 and promoting complete and accurate financial reporting in the public capital markets.Among its provisions,SOX created the Public Company Accounting Oversight Board(PCAOB or Board),thereby ending self-regulation in the audit profession;strengthened the independence of the audit;empowered independen
7、t audit committees to oversee audits and financial reporting;and strengthened executive accountability around the financial reporting process.”Read the full article here.Twenty Years Later,SOX Continues to Drive Trust in the Capital MarketsEYConsulting Q&A:An Emerging M&A OpportunityLink to ReadIn t
8、his Industry Update,we have included a collection of articles focused on accounting,audit,and advisory firms,highlighting recent M&A trends and key drivers.The Sarbanes-Oxley Act,which created the framework to separate audit from non-audit practices,recently celebrated its 20thyear anniversary.These
9、 changes plus the ability for private equity to invest in audit and accounting firms created an uptick in M&A activity within the sector.Harris Williams believes that the industry will continue to attract outside investment in both audit and non-audit practices as the Big Four divest of their audit
10、businesses.“Private equity investments in public accounting firms differ from traditional mergers in several ways,most notably in the way the new entities are structured and operated.In most deals,the attest side of a firm is retained as a partnership separate from the tax and advisory entity,in par
11、t to satisfy independence requirements.The PE investment is made in the tax and advisory entity,which is operated as a company with officers and employees rather than partners.Read the full article here.Private Equity Investment in Accounting Firms Elevates Marketers as Key PlayersAssociation for Ac
12、counting&Marketing“Deloitte is exploring a plan to split its global audit and consulting practices,following an effort by fellow Big Four accounting firm Ernst&Young to potentially spin off its consulting arm,according to people familiar with the matter.The moves would mark the biggest shake-up in t
13、he accounting industry in decades,handing windfalls to tens of thousands of the firms partners and creating two new consulting giants and two stripped-down auditing firms.”Read the full article here.Deloitte Explores Splitting Auditing,Consulting Arms,Following Ernst&YoungWall Street JournalProfessi
14、onal and Tech-Enabled Services|Q3 20220 x2x4x6x8x10 x12x14x16x18x20 x22x(50%)0%50%100%150%200%250%1)S&P Cap IQ;data as of August 30,2022 2)Comparable company sets listed on page 10Indexed Stock Price Performance for the period August 2017 August 2022Indexed Stock Price Performance for the period Aug
15、ust 2017 August 2022Professional and Tech-Enabled Services Public Company Performance and Trends1Historical Stock Prices Past 5 YearsHistorical Median TEV/LTM EBITDA Multiples Past 5 YearsRepresentative Key Public Comparables22Business Process OutsourcingConsultingHuman CapitalInsurance,Legal,and Ri
16、sk ServicesS&P 500 IndexProfessional and Tech-Enabled Services|Q3 20220.5x2.5x-0.3x2.5x12.6x13.5x6.2x17.2x-16.4%11.8%-20.2%1.4%18.1%11.5%5.9%27.3%18.1%10.8%5.1%24.8%12.3%20.2%18.0%11.8%6.4%7.0%-0.3%3.7%1)S&P Cap IQ;data as of August 30,2022Indexed Stock Price Performance for the period August 2017 A
17、ugust 2022Indexed Stock Price Performance for the period August 2017 August 2022Professional and Tech-Enabled Services Public Company Operating and Valuation Metrics1Public Company Operating MetricsPublic Company Valuation Metrics3Human CapitalConsultingBusiness Process OutsourcingInsurance,Legal,an
18、d Risk ServicesMedian Three-Year Revenue CAGR(2018-2021)Median LTM Revenue GrowthMedian Three-Year EBITDA Margin(2018-2021)Median LTM EBITDA Margin12-Month&Change in Stock PriceMedian TEV/2022E EBITDA MultipleNet Debt/LTM EBITDAProfessional and Tech-Enabled Services|Q3 2022Economic Trends 4U.S.GDP G
19、rowth1Consumer Confidence&Unemployment Rate2,3Non-Farm Payrolls(1 Month Net Change)3U.S.Initial Jobless Claims4Consumer Price Index3ISM Non-Manufacturing Index5(In billions indexed to 2014 USD)1)U.S.Bureau of Economic Analysis 2)The Conference Board3)U.S.Bureau of Labor Statistics4)U.S.Department of
20、 Labor5)Institute for Supply Management(25,000)(20,000)(15,000)(10,000)(5,000)05,00010,000Jul-14Jul-15Jul-16Jul-17Jul-18Jul-19Jul-20Jul-21Jul-220.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%0.020.040.060.080.0100.0120.0140.0160.0Jul-14Jul-16Jul-18Jul-20Jul-22Unemployment RateConsumer ConfidenceConsumer Co
21、nfidenceUnemployment Rate01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,000Jul-14Jul-15Jul-16Jul-17Jul-18Jul-19Jul-20Jul-21Jul-22Initial Claims0070Jul-14Jul-15Jul-16Jul-17Jul-18Jul-19Jul-20Jul-21Jul-22-0.5%1.5%3.5%5.5%7.5%9.5%Jul-14Jul-15Jul-16Jul-17Jul-18Jul-19Jul-20Jul-21J
22、ul-22YOY Change(15.0%)(10.0%)(5.0%)0.0%5.0%10.0%15.0%$16.8$17.3$17.8$18.3$18.8$19.3$19.8$20.3Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22GDP ValueAnnual Percentage GrowthProfessional and Tech-Enabled Services|Q3 2022M&A Market Trends52016Professional and Tech-Enabled Services M&A V
23、olume by Year022Select Accounting and Advisory TransactionsTargetBuyerTargetBuyerTargetBuyerTargetBuyerTargetBuyerTargetBuyer1)S&P Cap IQ;data as of August 30,20224273493483654274264254435004634744565482282063066367350233500500600700800Q1Q2Q3Q4Q
24、1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Number of DealsProfessional and Tech-Enabled Services|Q3 2022Recent Professional and Tech-Enabled Services Transactions Detail6DateTargetBusiness DescriptionAcquirer(s)8/29/22WilliamsMarston LLCAccounting,tax,and valuation advisory services providerKelso&
25、Company8/25/22Grant Thornton LLP(Public Sector)Audit and tax advisory services providerGuidehouse(Veritas Capital)8/23/22Allstate Corporate ServicesOutsourced corporate filing and registered agent services providerRegistered Agent Solutions(Lexitas:an Apax portfolio company)8/18/22Support Services G
26、roup,Inc.Outsourced contact center services providerKingswood Capital Management,LP8/18/22Paradigm Advisory GroupFinancing and accounting advisory services providerWilliamsMarston(Align Capital Partners)8/16/22Davis&Hosfield ConsultingFinancial and economic consultancy firmStout8/16/22Cambria Soluti
27、onsBusiness process consultancy firmErnst&Young LLP8/12/22On Time Reporting,Inc.Court reporting services providerMagna Legal Services8/12/22Crowe LLP(ESOP Sector)Accounting,consulting,and tech firmBlue Ridge ESOP Associates8/9/22Oracle CapitalValuation consultancy firmWilliamsMarston(Align Capital P
28、artners)8/9/22YSC ConsultingCEO advisory and leadership consultancy firmAccenture8/4/22ABACIERP and EPM consultancy firmAccordion(FFL Partners)8/1/22Barton&AssociatesHealthcare staffing services providerH.I.G.Capital7/28/22Code UnlimitedBuilding code consulting and fire protection engineering firmJe
29、nsen Hughes(Gryphon Investors)7/21/22Bespoke PartnersExecutive search and leadership advisory services providerAEA Growth7/18/22Phaidon InternationalStaffing services providerFurther Global6/22/22Brookson GroupCompliance and services platform providerPeople2.0(TPG)Professional and Tech-Enabled Servi
30、ces|Q3 20227Harris Williams Professional and Tech-Enabled Services ExperienceSelected TransactionsHarris Williams Transaction SpotlightThe company is an international membership organization focused on enhancing the knowledge and expertise of companies fighting money laundering,bribery,corruption an
31、d financial terrorism,along with organizing related international conferences,seminars and training,enabling clients to meet their continuing professional education needs to avoid financial crime.Company BackgroundScaled Agile is a leading global provider of the framework,platform,and professional t
32、raining content and certifications for implementing business agility practices across the enterprise.Company BackgroundHarris Williams advised Eurazeo on its acquisition of Scaled Agile,a portfolio company of Leeds Equity Partners and Rubicon Technology Partners.Transaction OverviewHarris Williams T
33、ransaction SpotlightTransaction OverviewHarris Williams advised Wendel Group on its acquisition of the Association of Certified Anti-Money Laundering Specialists(ACAMS),a business division of Adtalem Global Education.Professional and Tech-Enabled Services|Q3 20228Harris Williams:At a GlanceMinneapol
34、isWashington,DCLondonBostonSan FranciscoFrankfurtClevelandRichmondDedicated Harris Williams Asia-Pacific Coverage Team 30 years and thousands of deals closed100%of revenue is from M&A advisory10 Industry Groups with deep sector expertise70%of revenue from repeat clients8 offices across the U.S.and E
35、uropeHarris Williams Business Services&Specialty DistributionHarris Williams Professional and Tech-Enabled Services ContactsProfessional and Tech-Enabled Services Sectors Business Process Outsourcing Consulting Education&Training Engineering Financial Services Governance,Risk&Compliance Human Capita
36、l Management Information Technology Insurance&Risk Management Legal Services Marketing&Information Workforce Solutions Commercial&Industrial Services IT Services Professional Services Specialty DistributionBob BaltimoreManaging D(804)915-0129Derek LewisManaging D(804)915-0118Bryce WalkerD(804)887-61
37、54Maury NolenVice P(804)528-3570Katie BaskindBusiness Development M(804)915-0121Anthony BasmajianManaging D(804)887-6030Professional and Tech-Enabled Services|Q3 2022Harris Williams Capabilities and Locations9IndustrialsSpecialty DistributionBusiness ServicesConsumerBuilding Products&MaterialsAerosp
38、ace,Defense&Government ServicesEnergy,Power,InfrastructureHealthcare&Life SciencesTechnologyTransportation&LogisticsHarris Williams has a broad range of industry expertise,which creates powerful opportunities.Our clients benefit from our deep-sector experience,integrated industry intelligence and co
39、llaboration across the firm,and our commitment to learning what makes them unique.For more information,visit our website at .Office LocationsBostonOne International PlaceSuite 2620Boston,Massachusetts 02110Phone:+1(617)482-7501Cleveland1900 East 9th Street25th FloorCleveland,Ohio 44114Phone:+1(216)6
40、89-2400Minneapolis222 South 9th StreetSuite 3350Minneapolis,Minnesota 55402Phone:+1(612)359-2700Richmond1001 Haxall Point9th FloorRichmond,Virginia 23219Phone:+1(804)648-0072FrankfurtBockenheimer Landstrasse 33-3560325 FrankfurtGermanyPhone:+49 069 3650638 00London25 Savile Row4th FloorLondon,Englan
41、d W1S 2ERPhone:+44 20 7518 8900San FranciscoOne Market Plaza,Steuart Tower11th FloorSan Francisco,California 94105Phone:+1(415)288-4260Washington,D.C.800 17th St.NW2nd FloorWashington,D.C.20006Phone:+1 202-207-2300United StatesEuropeProfessional and Tech-Enabled Services|Q3 2022Sources&Disclaimers10
42、SourcesPublic Comparable Companies:BPO:Cognizant,Computershare,DXC,ExlService,Genpact,Tata Consultancy,TTEC,Wipro,and WNSConsulting:Accenture,CBIZ,CRA International,FTI Consulting,Huron Consulting Group,ICF International,and Resources ConnectionHuman Capital:ASGN,Barrett Business Services,Hays,Heidr
43、ick&Struggles International,Insperity,Kelly Services,Kforce,Korn Ferry,ManpowerGroup,Randstad,Robert Half International,SThree,TrueBlue,Willis Towers WatsonIL&R Services(Insurance,Legal,and Risk):Aon,Arthur J.Gallagher&Co.,Brown&Brown,Crawford&Company,Marsh&McLennan Companies,Willis Towers WatsonHar
44、ris Williams LLC is a registered broker-dealer and member of FINRA and SIPC.Harris Williams&Co.Ltd is a private limited company incorporated under English law with its registered office at 8th Floor,20 Farringdon Street,London EC4A 4AB,UK,registered with the Registrar of Companies for England and Wa
45、les(registration number 07078852).Harris Williams&Co.Ltd is authorized and regulated by the Financial Conduct Authority.Harris Williams&Co.Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main,Germany,under HRB 107540.The registered address
46、is Bockenheimer Landstrasse 33-35,60325 Frankfurt am Main,Germany(email address:).Geschftsfhrer/Directors:Jeffery H.Perkins,Paul Poggi.(VAT No.DE321666994).Harris Williams is a trade name under which Harris Williams LLC,Harris Williams&Co.Ltd and Harris Williams&Co.Corporate Finance Advisors GmbH co
47、nduct business.Investment banking services are provided by Harris Williams LLC(“Harris Williams”).Harris Williams is a registered brokerdealer and member of FINRA and SIPC.Harris Williams&Co.Ltd is a private limited company incorporated under English law with its registered office at 8th Floor,20 Fa
48、rringdon Street,London EC4A 4AB,UK,registered with the Registrar of Companies for England and Wales,registration number 07078852.Harris Williams&Co.Ltd is authorized and regulated by the Financial Conduct Authority.Harris Williams&Co.Corporate Finance Advisors GmbH is registered in the commercial re
49、gister of the local court of Frankfurt am Main,Germany,under HRB 107540.The registered address is Bockenheimer Landstrasse3335,60325 Frankfurt am Main,Germany(email address:).Geschftsfhrers/Directors:Jeffery H.Perkins,Paul Poggi,VAT No.DE321666994.Harris Williams is a trade name under which Harris W
50、illiams LLC,Harris Williams&Co.Ltd and Harris Williams&Co.Corporate Finance Advisors GmbH conduct business.The information and views contained in this content have been prepared in part by Harris Williams.This content does not purport to be comprehensive or to contain all the information that a reci
51、pient may need in order to evaluate any investment or potential transaction.This content is not a research report,as such term is defined by applicable law and regulations,and is provided for informational purposes only.Any and all information,including estimates,projections and other forwardlooking
52、 statements,presented in this document may involve various assumptions and significant elements of subjective judgment and analysis that may or may not be correct.Harris Williams has not independently verified,and neither Harris Williams nor any other person will independently verify,any of the info
53、rmation,estimates,projections or forwardlooking statements contained herein or the assumptions on which they are based.The information contained in this document is made as of the date hereof unless stated otherwise.Harris Williams does not expect to update or otherwise revise this document nor prov
54、ide any additional information,nor correct any inaccuracies herein which may become apparent.This content is intended for institutional use only and should not be relied upon by retail investors or members of the general public.The information contained herein is believed by Harris Williams to be re
55、liable but Harris Williams makes no representation or warranty as to the accuracy or completeness of such information,and information contained herein that is based on material prepared by others may involve significant elements of subjective judgment and analysis which may or may not be correct.Opi
56、nions,estimates and projections contained herein constitute Harris Williams judgment and are subject to change without notice.This content is not to be construed as investment advice an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in a
57、ny particular transaction,nor shall this content form the basis of any contract.It does not constitute and should not be construed as an endorsement or recommendation of any entities products or services.No part of this material may be copied or duplicated in any form or by any means,or redistributed,without Harris Williams prior written consent.Disclosures and Disclaimers