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1、Professional and Tech-Enabled Services Sector Brief Harris Williams|Q3 2024Professional and Tech-Enabled Services|Q3 2024Subsector Overview:Accounting and Advisory FirmsAccounting and advisory companies continue to see increasing interest from private equity investors and strategic players.Several k

2、ey attributes are driving investor interest.Accounting and advisory have a favorable and steady demand and growth trajectory,which appeals to private equity firms.Investment in technology to enhance productivity,workflow optimization,and leveraging specialized expertise are core drivers of investmen

3、t opportunities.Robust Growth OutlookOutsourced financial services space remains highly fragmented,which is a desirable characteristic for private equity firms seeking a buy-and-build thesis across both service lines and geographies.Fragmented Market Solutions via automation and introduction and/or

4、advancement of offshore resources provide avenues for productivity enhancement.Private equity firms are attracted to these options to improve companies margin profiles.Opportunities for Operational ImprovementMany firms have deep relationships with clients,recurring contracts,and regulatory driven d

5、emand that enables highly reoccurring and predictable revenue.Given the core,mission-critical requirement for accounting and advisory services,combined with increasing complexity in the Office of the CFO,demand for these professional services is resilient regardless of the market environment.Downsid

6、e Protection1Professional and Tech-Enabled Services|Q3 2024What Were ReadingRecent Harris Williams Industry Content“Accounting firms,consultancies and other professional services take outside cash to fund growth.Private equity is accelerating its pursuit of consultancies,talent agencies and accounti

7、ng firms,as it targets professional partnerships in one of the buyout industrys last unconquered territories.Acquisitions of partnerships could have more upside than other deals,and they point to lucrative exits on older buyouts in professional services as evidence for the investment thesis.”Read th

8、e full article here.Private Equity Groups Step Up Pursuit of White-Collar PartnershipsFinancial Times“Private Equity firms have bought stakes in 5 of the top 26 US accounting firms in less than three years.Why?They see huge untapped potential in these traditionally staid accounting firms.Shortly aft

9、er Baker Tilly announced its billion-dollar deal,Grant Thornton(GT)received its investment infusion from the PE firm New Mountain Capital.Since 2021,PE firms have been on a shopping spree,snapping up stakes in top accounting,planning,and advisory services.”Read the full article here.Private Equity M

10、oney Is Pouring into US CPA FirmsThe Finance Story“The accounting industry is undergoing significant transformation due to private equity investments,which are reshaping the sector by providing small tax&accounting firms with much-needed capital and operational expertise.Many industry observers woul

11、d think that it would be unheard of for a private equity firm to be interested in investing in small accounting firms simply because of their size.For PE firms,however,this instead represents a potentially limitless opportunity.”Read the full article here.The Rise of Private Equity in Accounting:Not

12、 Just for Large Firms AnymoreThomson ReutersIn this sector brief,we have included a collection of articles focused on investors and their interest in accounting and advisory.Given the strong financial profiles,resilience,sector consolidation,and opportunities for operational improvement,firms in acc

13、ounting and advisory continue to garner increased interest from investors across private equity and strategics alike.“Ten of the 30 largest U.S.accounting firms are in negotiations to be purchased by private equity firms.The acquisitions by financial buyers of those two top-10 firms by revenue opene

14、d the floodgates to other deals,positioning private equity to increase its influence over the US accounting profession dramatically.Deals can also mean windfalls for partners,and the prospect of capital appreciation via their ongoing stakes.”Read the full article here.Private Equity Groups Poised to

15、 Own One in Three Top US Accounting FirmsFinancial TimesRising Demand for Mission-Critical C-Suite Advisory ServicesLink to ReadData&Information Services:AI,Verticalization,and Actionable InsightsLink to ReadLegal Services:The Data AdvantageLink to Read2“CBIZ has agreed to acquire Marcum in a$2.3 bi

16、llion deal that would turn the latter accounting firms tax and consulting practices public and mark another structural shake-up outside of the Big Four.CBIZ would acquire Marcums consulting and tax services businesses,while its audit practice would be acquired by Mayer Hoffman McCann,a Kansas City,M

17、o.-based firm with which CBIZ has had a service agreement for more than 25 years.”Read the full article here.CBIZ Strikes Deal to Acquire Fellow Accounting Firm MarcumWall Street Journal Professional and Tech-Enabled Services|Q3 20241)S&P Cap IQ;data as of August 24,20242)Comparable company sets lis

18、ted on page 12Indexed Stock Price Performance for the Period August 2019 August 2024Indexed Stock Price Performance for the Period August 2019 August 2024Professional and Tech-Enabled Services Public Company Performance and Trends1Historical Stock Prices Past 5 YearsHistorical Median TEV/LTM EBITDA

19、Multiples Past 5 YearsRepresentative Key Public Comparables230 x2x4x6x8x10 x12x14x16x18x20 x22x0 x2x4x6x8x10 x12x14x16x18x20 x22xBusiness Process OutsourcingConsultingHuman CapitalInsurance,Legal,and Risk ServicesS&P 500 IndexProfessional and Tech-Enabled Services|Q3 2024Indexed Stock Price Performa

20、nce for the Period August 2019 August 2024Indexed Stock Price Performance for the Period August 2019 August 2024Professional and Tech-Enabled Services Public Company Operating and Valuation Metrics1Public Company Operating MetricsPublic Company Valuation MetricsHuman CapitalConsultingBusiness Proces

21、s OutsourcingInsurance,Legal,and Risk ServicesMedian 3-Year Revenue CAGR(2021-2024)Median LTM Revenue GrowthMedian 3-Year EBITDA Margin(2021-2024)Median LTM EBITDA Margin12-Month Change in Stock PriceMedian TEV/2024E EBITDA MultipleNet Debt/LTM EBITDA1)S&P Cap IQ;data as of August 24,2024412.0%8.9%6

22、.0%6.0%-0.7%7.3%-5.4%9.7%17.7%11.8%4.9%29.0%18.0%11.5%5.0%30.8%9.7%21.1%4.8%24.3%9.6x15.9x9.5x17.9x0.8x2.4x0.7x2.2xProfessional and Tech-Enabled Services|Q3 2024Economic Trends U.S.GDP Growth1Consumer Confidence and Unemployment Rate2,3Non-Farm Payrolls(1-Month Net Change)3U.S.Initial Jobless Claims

23、4Consumer Price Index3ISM Non-Manufacturing Index5(In billions indexed to 2016 USD)1)U.S.Bureau of Economic Analysis2)The Conference Board3)U.S.Bureau of Labor Statistics4)U.S.Department of Labor5)Institute for Supply Management5 -1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000

24、Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21 Aug-22 Aug-23 Aug-24Initial Claims-0.5%1.5%3.5%5.5%7.5%9.5%YOY Change(10.0%)(5.0%)0.0%5.0%10.0%15.0%20.0%$17.0$18.5$20.0$21.5$23.0$24.5$26.0$27.5$29.0$30.5Jul-16Jul-17Jul-18Jul-19Jul-20Jul-21Jul-22Jul-23Jul-24GDP ValueAnnual Percentage Growth0.0%2.0%4.0%6.0%

25、8.0%10.0%12.0%14.0%16.0%0.020.040.060.080.0100.0120.0140.0160.0Aug-16Aug-18Aug-20Aug-22Aug-24Unemployment RateConsumer ConfidenceConsumer ConfidenceUnemployment Rate(25,000)(20,000)(15,000)(10,000)(5,000)05,00010,000Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21 Aug-22 Aug-23 Aug-24 -10 20 30 40 50 60 70

26、Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21 Aug-22 Aug-23 Aug-24Professional and Tech-Enabled Services|Q3 2024M&A Market Trends2016Professional and Tech-Enabled Services M&A Volume by Year1Accounting and Advisory Firms Transactions20222017201820212020201920231)S&P Cap IQ;data as of August 24,202420246

27、3654274264254435004634744565114464514534822814335367955206306636735025294953684304434494034034750100200300400500600700800Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Number of DealsTargetBuyerTargetBuyerProfessional and Tech-Enabled Services|Q3 2024Recent Professional and Tech-Ena

28、bled Services Transactions Detail|Accounting and Advisory DateTargetBusiness DescriptionAcquirer(s)8/26/2024Saggar&Rosenberg,P.C.Saggar&Rosenberg,P.C.,provides audit,tax,and advisory services.Sikich CPA LLC 8/20/2024CUA OpCo,LLCCUA OpCo,LLC,doing business as United Urology Group,offers urology pract

29、ice operational,financial&accounting services.OneOncology,LLC8/8/2024Waller Helms AdvisorsWaller Helms Advisors provides investment banking and capital advisory services.Houlihan Lokey,Inc.8/7/2024DeHollander&Janse Financial GroupDeHollander&Janse Financial Group provides financial consulting servic

30、es.Apollon Financial,LLC8/1/2024Pro Sport Cpa PLLCPro Sport Cpa PLLC offers taxation and accounting services.Carr,Riggs&Ingram,LLC7/31/2024Marcum LLPMarcum LLP provides corporate financial,accounting,and consulting services.CBIZ,Inc.7/29/2024ValueScope,Inc.ValueScope,Inc.,provides financial reportin

31、g,tax reporting,transaction advisory,litigation support,and consulting services.Marshall&Stevens Incorporated7/23/2024Noble Oak FinancialNoble Oak Financial offers asset management,business,and retirement planning services.Avantax,Inc.;The Retirement Planning Group,LLC7/23/2024Janney Montgomery Scot

32、t LLCJanney Montgomery Scott LLC is a full-service financial services firm that offers financial advisory and brokerage services to individual,corporate,and institutional investors.KKR&Co.Inc.(NYSE:KKR)7/18/2024Province,LLCProvince,LLC,offers financial advisory services in areas of growth opportunit

33、ies,restructurings,and fiduciary to businesses.Trivest Partners,L.P.7/17/2024Arvo Tech,LLCArvo Tech,LLC,provides tax services.Bandon Partners7/16/2024capSpire Inc.capSpire Inc.is a consulting and software company that provides advisory services in the areas of enterprise content management,commodity

34、 trading,risk management,analytics,and optimization.Falfurrias Management Partners LP7/11/2024Aprio,LLPAprio,LLP,provides auditing and accounting services.Charlesbank Capital Partners,LLC7/10/2024Financial Research Associates,Inc.Financial Research Associates,Inc.,provides business valuation,forensi

35、c accounting,and related services to business owners and financial and legal communities.Stout Risius Ross,LLC6/13/2024Giraffe Financial Inc.Giraffe Financial Inc.offers end-to-end online tax preparation solution that intends to help users understand their likely eligibility and estimate the value o

36、f their tax credit.Skyview Ventures,LLC6/4/2024McGowan GuntermannMcGowan Guntermann is an accounting firm.NDH Group,Ltd.7Professional and Tech-Enabled Services|Q3 2024Harris Williams Professional and Tech-Enabled Services ExperienceSelected TransactionsHarris Williams Transaction SpotlightVMG is a t

37、rusted advisor to a diverse base of highly regulated clients in the healthcare space,such as hospital systems,physician groups,and ambulatory surgery centers.The company provides valuation,advisory,compliance,and financial due diligence services while addressing the complex and recurring demands of

38、their clients.Company BackgroundTransaction OverviewHarris Williams advised VMG Health,a portfolio company of Northlane Capital Partners,on its sale to Incline Equity Partners.9Professional and Tech-Enabled Services|Q3 2024GLOBAL INVESTMENT BANKBusiness Services Coverage AreasTech-Enabled and Profes

39、sional ServicesCommercial&Industrial ServicesIT ServicesSpecialty DistributionProfessional and Tech-Enabled Services Coverage AreasBusiness Process OutsourcingConsultingEducation&TrainingEngineeringComplianceFinancial ServicesGovernance,Risk&ComplianceHuman Capital ManagementInformation TechnologyeC

40、ommerce&RetailInsurance&Risk ManagementLegal ServicesMarketing&InformationWorkforce SolutionsDerek LewisGroup H(804)915-0118Brian LucasGroup H(804)887-6023Anthony BasmajianManaging D(804)887-6030Pete MorganD(804)887-6170Contact UsBryce WalkerManaging D(804)887-615410Professional and Tech-Enabled Ser

41、vices|Q3 2024Harris Williams is a global investment bank specializing in M&A and private capital advisory services.Clients worldwide rely on us to help unlock value in their business and turn ambitious goals into reality.We approach every engagement with boundless collaboration,pooling expertise and

42、 relationships across industries,service offerings,and geographies.GLOBAL INVESTMENT BANKProven ExpertiseCore Values That Drive SuccessDeep Industry ExperienceBoston|Chicago|Cleveland|Frankfurt|London|Minneapolis|New York|Richmond|San Francisco|Washington,D.C.Aerospace,Defense&Government ServicesBus

43、iness ServicesConsumerEnergy,Power&InfrastructureTransportation&LogisticsTechnologyIndustrialsHealthcare&Life SciencesM E R G E R S&A C Q U I S I T I O N SP R I M A R Y F U N D P L A C E M E N TP R I V A T E C A P I T A L S O L U T I O N SRevenue from repeat clients75%Managing Directors promoted fro

44、m within87%Year history30+11Professional and Tech-Enabled Services|Q3 2024Sources&DisclaimersSourcesPublic Comparable Companies:BPO:Cognizant,Computershare,DXC,ExlService,Genpact,Tata Consultancy,TTEC,Wipro,and WNSConsulting:Accenture,CBIZ,CRA International,FTI Consulting,Huron Consulting Group,ICF

45、International,and Resources ConnectionHuman Capital:ASGN,Barrett Business Services,Hays,Heidrick&Struggles International,Insperity,Kelly Services,Kforce,Korn Ferry,ManpowerGroup,Randstad,Robert Half International,SThree,TrueBlueIL&R Services(Insurance,Legal,and Risk):Aon,Arthur J.Gallagher&Co.,Brown

46、&Brown,Crawford&Company,Marsh&McLennan Companies,Willis Towers WatsonHarris 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 13th floor,One Angel Court,London EC2R

47、7HJ,U.K.,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,number 5408952.Harris Williams Private Capital Advisory Ltd.is an Appointed Representative of Sturgeon Venture

48、s,LLP,which is authorized and regulated by the Financial Conduct Authority number 452811.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 is Bockenheimer Landstrasse 33-

49、35,60325 Frankfurt am Main,Germany(email address:),Geschftsfhrer/Director: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 conduct business.HW is an affiliate of The PNC Financ

50、ial Services Group,Inc.,which,together with its subsidiaries and affiliates and their agents(collectively,“PNC”),engages in a broad range of businesses.PNC may have had,and may currently or in the future have,business with or ownership in the company and its related persons,potential parties to the

51、proposed transaction and their related persons,or their competitors,customers,or suppliers.When HW is engaged to provide adviser services in a transaction,HW is acting only for its client in connection with the proposed transaction.The distribution of this document in certain jurisdictions may be re

52、stricted by law,and accordingly,recipients of this document represent that they are able to receive this document without contravention of any registration requirement or other legal restrictions in the jurisdictions in which they reside or in which they conduct business.This document does not conta

53、in all the information needed to assess any transaction.You must conduct your own investigations and analyses.HW does not provide accounting,tax,investment,regulatory,or legal advice to anyone.This document is for discussion purposes only and is not a recommendation,offer,or solicitation for the pur

54、chase or sale of any security or an invitation or inducement to engage in any transaction or investment activity.HW obtained the information in this document from company and/or thirdparty sources.HW has not independently verified such information and no obligation is undertaken to provide updated o

55、r additional information.No representation or warranty,expressed or implied,is made in relation to the fairness,accuracy,correctness,or completeness of the information,opinions,or conclusions expressed herein.All forwardlooking statements herein involve assumptions and elements of subjective judgmen

56、t and analysis and are not facts.Nothing in this document guarantees future results or performance.This document is only being distributed to,and only made available to,and directed at:(a)persons who are outside the United Kingdom;(b)persons in the United Kingdom who have professional experience in

57、matters relating to investments falling within Article 19(5)of the U.K.Financial Services and Markets Act 2000(Financial Promotion)Order 2005,as amended(the“Order”);(c)high net worth entities and other persons to whom it may otherwise lawfully be communicated falling within Article 49(2)(a)and(d)of

58、the Order;or(d)any other person to whom this document may otherwise lawfully be communicated or caused to be communicated(all such persons in b to d together being referred to as“Relevant Persons”).This document must not be acted on or relied on by persons who are not Relevant Persons.In the U.K.,any investment or investment activity to which this document relates is only available to,and will be engaged with,Relevant Persons.Important Disclosures12