Citrin Cooperman has just changed PE hands with a few notable datapoints:
- Emergence of secondary market for professional services - 15x EBIT paid up from 11x when its New Mountain bought it -Blackstone making moves into sector https://www.ft.com/content/5e677d35-2171-499c-ba52-abbaa236c3a1 With valuations up, the largest PE firms making moves and an emerging secondary mkt what does it mean? Big 4 next?
Coach
I reckon EY are showing up to sell its consulting business and keep key services inside the EYP brand.
Agreed, EY consulting will be the biggest target; they may be ready to sell…
PwC given recent experience with Vialto is my guess
If you believe GenAI will change consulting as we know it, this may not be a bad time to sell and monetize
It means PE has accumulated too much capital and is struggling to deploy it, so the multiples are being driven up as they compete for assets. That sounds like a precursor to losing their ass.
Pro serve isn’t exactly a sector that’s headed to the moon, if you haven’t noticed.
Completely agree the amount of dry powder is what has started the trend but it has definitely become a flood of deals…
https://www.cityam.com/the-277bn-golden-ticket-why-private-equity-is-so-interested-in-professional-services/
Whether the sector is “headed to the moon” and makes sense in the long term is anyone’s guess but New Mountain just made a massive return (admittedly there has been some bolt on in the interim) from the price they paid 3 years ago with revenues have almost tripled in that time. So x15 on the increased EBIT.
So there is short term gains to be made (but undoubtedly plenty will lose their shirt when the music stops) for some at least and with the amount of dry powder sitting around the flow will only increase for now.
Mentor
OP you’re saying it is PwC? What are the good reasons?