Major public equity indices moved higher in Q1 2024, up 8% quarter-over-quarter and up 27% year-over-year. Stabilization of most leading indicators has eased concerns of an economic downturn, prompting corporate investment in growth initiatives. However, investor sentiment has been cautious as the Federal Reserve continues to hold interest rates at elevated levels.
Valuation multiples within the Professional Services sector have remained flat quarter-over-quarter, with the composite indices increasing by less than 1%. Nevertheless, the sector has experienced year-over-year growth of 21%, in line with most major indices.
Volatile equity markets and tightened credit availability have tempered M&A activity in the overall market. However, the ample supply of cash and equity capital will continue to serve as a catalyst for M&A, with both corporate and private equity buyers competing for high-quality assets. Heading into Q2 2024, market indicators suggest that transaction activity in the Professional Services sector will continue to outperform the broader market.
BGL’s Quarterly Professional Services Update highlights public company operating metrics and M&A activity in the Human Resources Outsourcing, Contact Center Services, and Fixed Asset Management subsectors. BGL remains committed to informing clients of the current state of the Professional Services market and is always available to discuss appropriate M&A strategies and financing alternatives with its clients and prospects.
For your complimentary copy, reach out directly to BGL Managing Director Peter Hill of the firm’s Professional Services investment banking team using the form below.