sectorwatch: management consulting...18dec19 maven wave partners llc atos se - - - - 18dec19 net...

Sectorwatch:Management ConsultingFebruary 2020

2

Management ConsultingFebruary 2020

Sector Dashboard [4]

Public Basket Performance [5]

Operational Metrics [7]

Valuation Comparison [10]

Recent Deals [13]

Appendix [15]

7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to be delivered only inconjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice & Disclaimer at the end of the document. Alldata cited in this document was believed to be accurate at the time of authorship and came from publicly available sources. Neither 7 Mile Advisors nor 7MSecurities make warranties or representations as to the accuracy or completeness of third-party data contained herein. This document should be treated asconfidential and for the use of the intended recipient only. Please notify 7 Mile Advisors if it was distributed in error.

3

Overview

7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. We advise on M&A and private capital transactions, and provide market assessments and benchmarking. As a close knit team with a long history together and a laser focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets. We publish our sectorwatch, a review of M&A and operational trends in the industries we focus.

Dashboard• Summary metrics on the sector• Commentary on market momentum by

comparing the most recent 12-month performance against the last 3-year averages.

Public Basket Performance• Summary valuation and operating metrics

for a basket of comparable public companies

Valuation Comparison• Graphical, detailed comparison of valuation

multiples for the public basket

Recent Deals• The most recently announced deals in the

sector

4

Dashboard

Operating Metrics

Valuation

10.2%

11.0%

34.8%

0% 10% 20% 30% 40%

Median LTM EBITDA Margin %

Median LTM Rev. Growth %

Median LTM GP Margin %

1.7x

11.8x

17.9x

22.8x

0x 10x 20x 30x

Median TEV / LTM Revenue

Median TEV / LTM EBITDA

Median TEV / LTM EBIT

Median Price / LTM Earnings

Revenue Growth Momentum

3.9% 1 - year revenue growth compared to revenue growth

average for last 3 years

Pricing / Gross Margin Momentum

1.2% 1 - year gross profit % compared to gross profit %

average for last 3 years

Profitability Momentum

1.6% 1 - year EBITDA % compared to EBITDA % average for

last 3 years

Current revenue growth rate exceeds the average of the last 3 years by this

amount, indicating that market momentum is increasing

Current gross profit margin exceeds the average of the last 3 years gross profit

margin by this amount, indicating supplier pricing power

Current EBITDA margin exceeds the average of the last 3 years EBITDA margin

by this amount, a condition that may attract new entrants

5

Public Basket

Company TEV $mLTM Rev

$m

Rev Growth

YoY GP %EBITDA

%TEV / Rev X

TEV / EBITDA

X # FTEsRev / FTE $k

The Hackett Group, Inc. 462 261 -1% 37% 15% 1.8 10.9 1,209 216

CRA International, Inc. 541 441 9% 30% 9% 1.2 9.6 687 642

Huron Consulting Group Inc. 1,612 965 21% 40% 10% 1.7 14.4 - NA

ICF International, Inc. 1,912 1,460 14% 36% 9% 1.3 11.8 7,000 209

FTI Consulting, Inc. 4,138 2,353 16% 35% 15% 1.8 10.3 5,567 423

Booz Allen Hamilton Holding Corporation 11,623 7,274 11% 24% 10% 1.6 14.6 26,100 279

Accenture plc 123,160 43,968 5% 31% 16% 2.8 17.4 492,000 89

Average 20,493 8,103 11% 33% 12% 1.7 12.7 76,080 309

Median 1,912 1,460 11% 35% 10% 1.7 11.8 5,567 247

share price as of 26Feb20

6

Public Basket Valuation Trends

Public EBITDA Multiples over Time

Public Revenue Multiples over Time

0x

1x

1x

2x

2x

May-1

5

Aug-1

5

Nov-1

5

Feb-1

6

May-1

6

Aug-1

6

Nov-1

6

Feb-1

7

May-1

7

Aug-1

7

Nov-1

7

Feb-1

8

May-1

8

Aug-1

8

Nov-1

8

Feb-1

9

May-1

9

Aug-1

9

Nov-1

9

Feb-2

0

TEV/Revenue - Median TEV/Revenue - Average

0x

5x

10x

15x

20x

May-1

5

Aug-1

5

Nov-1

5

Feb-1

6

May-1

6

Aug-1

6

Nov-1

6

Feb-1

7

May-1

7

Aug-1

7

Nov-1

7

Feb-1

8

May-1

8

Aug-1

8

Nov-1

8

Feb-1

9

May-1

9

Aug-1

9

Nov-1

9

Feb-2

0

TEV/EBITDA - Median TEV/EBITDA - Average

11.7x

1.3x

0x

2x

4x

6x

8x

10x

12x

14x

16x

May-1

5

Aug-1

5

Nov-1

5

Feb-1

6

May-1

6

Aug-1

6

Nov-1

6

Feb-1

7

May-1

7

Aug-1

7

Nov-1

7

Feb-1

8

May-1

8

Aug-1

8

Nov-1

8

Feb-1

9

May-1

9

Aug-1

9

Nov-1

9

Feb-2

0

TEV/EBITDA - Median TEV/Revenue - Median

TEV/EBITDA - Average TEV/Revenue - Average

7

Operational Metrics

LTM Gross Profit Margin % LTM EBITDA %

- 5% 10% 15% 20%

Median

CRA International, Inc.

ICF International, Inc.

Booz Allen Hamilton

Holding Corporation

Huron Consulting Group

Inc.

FTI Consulting, Inc.

The Hackett Group, Inc.

Accenture plc

- 10% 20% 30% 40%

Median

Booz Allen Hamilton

Holding Corporation


Accenture plc


Inc.




8

Operational Metrics

LTM Revenue Growth %LTM Revenue per

Full Time Employee x 000’s

(10%) - 10% 20%

Median


Accenture plc



Inc.

Booz Allen Hamilton

Holding Corporation



$- $200 $400 $600 $800

Median

Accenture plc



Booz Allen Hamilton

Holding Corporation


Inc.


9

Operational Metrics

Accounts Receivable TurnoverAverage Days

Sales Outstanding

0x 2x 4x 6x 8x 10x

Median





Inc.


Booz Allen Hamilton

Holding Corporation

Accenture plc

0 30 60 90 120 150

Median

Accenture plc

Booz Allen Hamilton Holding

Corporation



Inc.




10

Valuation

TEV / LTM Revenue TEV / LTM EBITDA

0x 1x 2x 3x

Median

CRA International,

Inc.

ICF International,

Inc.

Booz Allen Hamilton

Holding Corporation

The Hackett Group,

Inc.


Huron Consulting

Group Inc.

Accenture plc

0x 5x 10x 15x 20x

Median

CRA International,

Inc.


The Hackett Group,

Inc.

ICF International,

Inc.

Booz Allen Hamilton

Holding Corporation

Huron Consulting

Group Inc.

Accenture plc

11

Valuation

TEV / LTM EBIT Price / LTM Earnings

0x 10x 20x 30x

Median




Booz Allen Hamilton

Holding Corporation


Accenture plc


Inc.

0x 10x 20x 30x 40x

Median





Booz Allen Hamilton

Holding Corporation

Accenture plc


Inc.

12

Valuation

Historical Valuation Multiples versus Gross Profit

Historical Valuation Multiples versus Revenue Growth Rate

9x 11x 11x 12x 15x 16x 17x

29.6%

34.8%

37.4%

35.7%

23.8%

34.3%

31.1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0x

2x

4x

6x

8x

10x

12x

14x

16x

18x

20x

LTM

GP%

EBIT

DA(x

)

EBITDA(x) LTM GP%

9x 11x 11x 12x 15x 16x 17x

8.1%

16.0%

(1.4%)

13.9%

11.0%

10.3%

5.4%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0x

2x

4x

6x

8x

10x

12x

14x

16x

18x

20x

LTM

RG

R%

EBIT

DA(x

)

EBITDA(x) LTM RGR%

13

Recent Transactions

Date Target Buyer / Investor

Total Transaction

Value Target

Revenue TEV /

Revenue TEV /

EBITDA

19Feb20 Kalypso LP Rockwell Automation, Inc. - - - -

22Jan20 Duff & Phelps Corporation Stone Point Capital LLC; Further Global Capital Management, L.P.

4,200.00 - - -

20Dec19 Conway MacKenzie, Inc. Riveron Consulting, LP - - - -

18Dec19 Maven Wave Partners LLC Atos SE - - - -

18Dec19 Net eSolutions Corporation NTT DATA Services, LLC - - - -

17Dec19 Purple Square Management Partners B.V. Ctac N.V. - 5.58 - -

2Dec19 Apis Group Pty Ltd Accenture plc - - - -

11Nov19 Presence of IT, Inc. Workforce Insight, LLC - - - -

31Oct19 Bow & Arrow Limited Accenture Interactive - - - -

29Oct19 Shanghai Dingqun Enterprise Management Consulting Co., Ltd.

Sinopharm Holding GuoDa Drug Store Co., Ltd. 132.22 - - -

23Oct19 Revel Consulting, Inc. Infogain Corporation - - - -

2Oct19 Anthony Hodges Consulting Limited Arthur J. Gallagher & Co. - - - -

22Mar19 Hangzhou Yihui Business Consulting Co., Ltd. Shanghai Xuxiao Enterprise Management Co., Ltd. 53.40 - - -

18Sep19 Hangzhou Yihui Business Consulting Co., Ltd. Shanghai Xuxiao Enterprise Management Co., Ltd. 40.83 - - -

25Jul19 PowerData Solutions SL Devoteam SA - 2.19 - -

3Sep19 Westney Consulting Group, Inc. McKinsey & Company, Inc. - - - -

5Jun19 Torres Advanced Enterprise Solutions, LLC Bootstrap Capital, LLC - - - -

22Jul19 Frank & Company, p.c. Prager Metis CPAs, LLC - - - -

19Jul19 W Group INC. Wavestone SA 30.50 26.10 1.2x -

28Jun19 Changxing Lincheng Enterprise Management Consulting Co., Ltd.

Noblelift Intelligent Equipment Co.,Ltd. 53.73 - - -

26Jun19 Auriemma Consulting Group, Inc. CNL Strategic Capital, LLC 44.50 - - -

24Jun19 Altran Technologies S.A. Capgemini SE 4,328.71 - 1.6x 13.1x

29May19 BusinessForward, Inc. Acorio LLC - - - -

3Jun19 Oxygy Management Consulting SPV Baseline Ltd. - - - -

30May19 Profectus, LLC Excel Search Group, LLC - - - -

1May19 Credere Group, LLC Eliassen Group, LLC - - - -

9Apr19 KSM Consulting, LLC Renovus Capital Partners - - - -

3Apr19 Global Tech Inc. Tetra Tech, Inc. 49.70 - - -

14

APPENDIX:

Public Basket

Constituents

7 Mile Advisors appreciates the opportunity to present this confidential information to the Company. This document is meant to be delivered only inconjunction with a verbal presentation, and is not authorized for distribution. Please see the Confidentiality Notice & Disclaimer at the end of the document. Alldata cited in this document was believed to be accurate at the time of authorship and came from publicly available sources. Neither 7 Mile Advisors nor 7MSecurities make warranties or representations as to the accuracy or completeness of third-party data contained herein. This document should be treated asconfidential and for the use of the intended recipient only. Please notify 7 Mile Advisors if it was distributed in error.

Management ConsultingFebruary 2020

15

Public Basket


The Hackett Group, Inc. operates as a strategic advisory andtechnology consulting firm primarily in North America andEuropean countries. Its executive advisory programs includebest practice intelligence center, an online searchablerepository of best practices, performance metrics, conferencepresentations, and associated research; best practiceaccelerators that provide Web based access to best practices,customized software configuration tools, and best practiceprocess flows; advisor inquiry, an inquiry service used by clientsfor access to fact-based advice on proven approaches andmethods; best practice research, a research that providesinsights into the proven approaches; and peer interactioncomprising member-led Webcasts, annual best practiceconferences, annual member forums, membership performancesurveys, and client-submitted content. The company’sbenchmarking services conduct studies in the areas of selling,general and administrative, finance, human resources,information technology, procurement, enterprise performancemanagement, shared service centers, and working capitalmanagement. The company was founded in 1991 and isheadquartered in Miami, Florida.

Date Key Development Headline5/7/19 The Hackett Group Intends To Seek Acquisitions

0x

1x

2x

3x

Revenue Multiples - The Hackett Group, Inc.

TEV/Revenue Average

0x

10x

20x

30x

EBITDA Multiples - The Hackett Group, Inc.

TEV/EBITDA Average

0x

20x

40x

60x

P/E Multiples - The Hackett Group, Inc.

P/E Average

16

Public Basket


CRA International, Inc., a consulting company, provideseconomic, financial, and management consulting services in theUnited States, the United Kingdom, and internationally. Thecompany advises clients on economic and financial matterspertaining to litigation and regulatory proceedings; and guidescorporations through critical business strategy andperformance-related issues. The company’s consultingservices include research and analysis, expert testimony, andsupport in litigation and regulatory proceedings in the areas offinance, accounting, economics, insurance, and forensicaccounting and investigations to corporate clients andattorneys. In addition, its management consulting servicescomprise strategy development, performance enhancement,corporate strategy and portfolio analysis, estimation of marketdemand, new product pricing strategies, valuation ofintellectual property and other assets, assessment ofcompetitors' actions, and analysis of new sources of supply. Itserves various industries, including agriculture; banking andcapital markets; chemicals; communications and media;consumer products; energy; entertainment; financial services;health care; insurance; life sciences; manufacturing; metals,mining, and materials; oil and gas; real estate; retail; sports;telecommunications; transportation; and technology. CRAInternational, Inc. was founded in 1965 and is headquartered inBoston, Massachusetts.

0.0x

0.5x

1.0x

1.5x

2.0x

Revenue Multiples - CRA International, Inc.

TEV/Revenue Average

0x

4x

8x

12x

16x

20xEBITDA Multiples - CRA International, Inc.

TEV/EBITDA Average

0x

20x

40x

60x

80x

P/E Multiples - CRA International, Inc.

P/E Average

17

Public Basket

Huron Consulting Group Inc.

Huron Consulting Group Inc., a professional services firm,provides advisory, technology, and analytic solutions in theUnited States and internationally. Its Healthcare segmentprovides advisory services in the areas of strategy, caretransformation, financial and operational performance,technology and analytics, and leadership development tonational and regional hospitals, integrated health systems,academic medical centers, community hospitals, and medicalgroups. Its Business Advisory segment provides enterpriseperformance management, enterprise resource planning,business intelligence and analytics, customer relationshipmanagement, and data management services; and capitaladvisory, transaction advisory, operational improvement,restructuring and turnaround, valuation, and dispute advisoryservices. Huron Consulting Group Inc. was founded in 2002 andis headquartered in Chicago, Illinois.

0x

1x

2x

3x

4xRevenue Multiples - Huron Consulting Group

Inc.

TEV/Revenue Average

0x

10x

20x

30xEBITDA Multiples - Huron Consulting Group

Inc.

TEV/EBITDA Average

0x

20x

40x

60x

80x

100x

P/E Multiples - Huron Consulting Group Inc.

P/E Average

Date Key Development Headline10/29/19 Huron Announces Partnership with Medically Home Group, Inc

18

Public Basket


ICF International Inc. provides management, marketing,technology, and policy consulting and implementation servicesto government and commercial clients in the United States andinternationally. It also identifies, defines, and implementspolicies, plans, programs, and business tools through a range ofstandard and customized methodologies for its clients;conducts survey research; collects and analyzes various data tounderstand critical issues and options for its clients; andprovides actionable business intelligence, as well as informationand data management solutions that allow integrated, andpurpose-driven data usage. ICF International, Inc. was foundedin 1969 and is headquartered in Fairfax, Virginia.

Date Key Development Headline1/13/20 ICF International, Inc., Incentive Technology Group Llc - M&A

Call

2/26/19 ICF To Seek Acquisitions

0.0x

0.5x

1.0x

1.5x

2.0xRevenue Multiples - ICF International, Inc.

TEV/Revenue Average

0x

5x

10x

15x

20xEBITDA Multiples - ICF International, Inc.

TEV/EBITDA Average

0x

10x

20x

30xP/E Multiples - ICF International, Inc.

P/E Average

19

Public Basket


FTI Consulting, Inc. provides business advisory services tomanage change, mitigate risk, and resolve disputes worldwide.The company’s Corporate Finance & Restructuring segmentprovides turnaround and restructuring, business transformation,interim management, valuation and financial advisory,transaction, dispute advisory, and tax services, as well asmergers and acquisitions (M&A), and M&A integration services.Its Forensic and Litigation Consulting segment offers anti-corruption investigations and compliance, and data andanalytics, as well as compliance, monitoring, and receivershipservices; cybersecurity, forensic accounting and advisory, andglobal risk and investigations practice; and constructionsolutions, dispute advisory, intellectual property, trial, businessinsurance claims, and health solutions. FTI Consulting, Inc. wasfounded in 1982 and is headquartered in Washington, District ofColumbia.

Date Key Development Headline8/7/19 FTI Consulting, Inc. (NYSE:FCN) completed the acquisition of

Andersch AG Wirtschaftsprüfungsgesellschaft.

6/27/19 FTI Consulting, Inc. (NYSE:FCN) entered into a definitive agreement to acquire Andersch AG Wirtschaftsprüfungsgesellschaft.

11/30/18 FTI Consulting May Seek Acquisitions

0x

1x

2x

3xRevenue Multiples - FTI Consulting, Inc.

TEV/Revenue Average

0x

5x

10x

15x

20xEBITDA Multiples - FTI Consulting, Inc.

TEV/EBITDA Average

0x

20x

40x

60xP/E Multiples - FTI Consulting, Inc.

P/E Average

20

Public Basket

Booz Allen Hamilton Holding Corporation

Booz Allen Hamilton Holding Corporation providesmanagement and technology consulting, engineering, analytics,digital, mission operations, and cyber solutions to governments,corporations, and not-for-profit organizations in the UnitedStates and internationally. The company offers consultingsolutions for various domains, business strategies, humancapital, and operations. It also provides analytics services, whichfocuses on delivering transformational solutions in the areas ofdecision analytics, including operations research and costestimation; automation; and data science, which includepredictive modeling and machine learning, as well as new oremerging areas, such as deep learning and artificial intelligence.Booz Allen Hamilton Holding Corporation was founded in 1914and is headquartered in McLean, Virginia.

0x

1x

2x

3xRevenue Multiples - Booz Allen Hamilton

Holding Corporation

TEV/Revenue Average

0x

10x

20x

30xEBITDA Multiples - Booz Allen Hamilton

Holding Corporation

TEV/EBITDA Average

0x

10x

20x

30x

40xP/E Multiples - Booz Allen Hamilton Holding

Corporation

P/E Average

21

Public Basket

Accenture plc

Accenture plc provides consulting, technology, and outsourcingservices worldwide. Its Communications, Media & Technologysegment provides professional services that help clientsaccelerate and deliver digital transformation, and enhancebusiness results through industry-specific solutions forcommunications, media, and high tech industries, as well as forsoftware platforms. The company’s Financial Services segmentoffers services that address profitability pressures, industryconsolidation, regulatory changes, and the need to continuallyadapt to new digital technologies. This segment serves clients inbanking, capital markets, and insurance industries. Accentureplc was founded in 1989 and is based in Dublin, Ireland.

Date Key Development Headline2/24/20 Accenture plc (NYSE:ACN) acquired Fruendo Srl from Ausilia

S.r.l.

2/18/20 Accenture plc (NYSE:ACN) acquired VanBerlo.

2/16/20 Accenture plc (NYSE:ACN) acquired Icon Integration Pty Ltd.

2/10/20 Accenture plc (NYSE:ACN) completed the acquisition of maihiro GmbH.

2/2/20 Accenture plc (NYSE:ACN) agreed to acquire Mudano.

0x

1x

2x

3x

4x

Revenue Multiples - Accenture plc

TEV/Revenue Average

0x

5x

10x

15x

20xEBITDA Multiples - Accenture plc

TEV/EBITDA Average

0x

10x

20x

30x

40xP/E Multiples - Accenture plc

P/E Average

22

7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. We advise on M&A and private capital

transactions and provide market assessments and benchmarking. As a close-knit team with a long history together and a laser focus on our target markets,

we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets. Securities offered through 7M Securities LLC.

Leroy Davis, Partner 704.899.5962 [email protected]

Tripp Davis, Partner 704.899.5762 [email protected]

Andy Johnston, Partner 704.899.5961 [email protected]

Mark Landry, Managing Director 561.972.0609 [email protected]

Ben Lunka, Managing Director 704.496.2995 [email protected]

Neil Churman, Director 281.742.9340 [email protected]

John Cooper, Director 704.973.3996 [email protected]

Tim Frye, Director 704.973.3994 [email protected]

Kristina Sergueeva, Director 704.899.5149 [email protected]

Ben Garber, Vice President 412.626.7898 [email protected]

Nicholas Prendergast, Vice President 704.973.3995 [email protected]

Ariail Barker, Director, Sales & Marketing 704.981.2908 [email protected]

Emily Halstenberg, Marketing & Sales Coordinator 704.409.9912 [email protected]

Marty Johnson, Senior Associate 704.973.3999 [email protected]

Sydney Scadden, Senior Associate 704.973.3998 [email protected]

Garth Martin, Senior Associate 704.973.3997 [email protected]

Steve Buffington, Associate 704.960.1828 [email protected]

Dennis Fox, Associate 704.706.9168 [email protected]

Rory Julyan, Associate 704.981.2520 [email protected]

Daniel Kim, Associate 704.912.4584 [email protected]

Olufunke Abass, Associate 704.285.8171 [email protected]

CONTACT INFO

sectorwatch: management consulting...18dec19 maven wave partners llc atos se - - - - 18dec19 net...

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