The global management consulting services market was valued at $316.6 billion in 2021 and is anticipated to grow by $814.6 billion by 2031, at a CAGR of 10.6%. 1
According to the Management Consultancies Association, UK consulting activity is expected to grow by 13% in 2023 and 12% in 2024, as firms experience a significant increase in demand from clients during period of disruption and change. 2
This future growth follows an estimated growth of 25% in 2022 by the sector due to a large increase in client work on digital transformation, cost reduction and sustainability.
Key areas expected to drive this growth include digital and technology, cost reduction, cyber security, sustainability, and achieving net zero goals.
| Consulting area | Services | Companies shown |
|---|---|---|
| Governance, Risk, and Compliance | Political/Country Risk; Due Diligence; Fraud & Internal Investigations | Kroll; Control Risks; FTI Consulting |
| Operations | Supply Chain & Logistics; Sourcing & Procurement; Finance | Accenture; Bain & Company; Deloitte. |
| Organisational | Compensation & Benefits; Talent and Management; Learning and Development | Mercer; WTW; Hewitt |
| IT & Technology | ERP Implementation; Data Analytics; Systems Integration | IBM; Oracle; SAP |
| ESG and Sustainability | Net Zero Carbon Strategy; ESG Reporting; Energy Management | EVORA; ERM; RSK |
| Multiple | Current | Forward |
|---|---|---|
| Revenue | 1.61x | 1.5x |
| EBITDA | 14.7x | 13.2x |
| Revenue | EBITDA |
|---|---|
| 1-2x | 5-7x |
Strategic acquisitions are an efficient way to expand geographic reach and enter new markets without building a new practice from scratch.
This path is becoming increasingly common following the increase in remote work.
Accenture / Optimind — To acquire
Accenture has announced its intent to acquire Optimind, a Paris-based independent consulting firm that provides advisory services and solutions to help insurance firms, banks and large corporate clients to meet major challenges of competitiveness, transformation and regulation.
Bridges Fund Management, MSCI and Farview Equity / EVORA Global — Backing of
Advised by Polestar, EVORA Global, a UK company which works with influential names in real estate, gained substantial backing from international investors in a funding round led by Bridges Fund Management, a specialist sustainable and impact investor. The equity investment round will enable EVORA to expand its offering to support clients globally, while further developing its tech platform.
McKinsey & Company / SCM Connections — Acquired
McKinsey & Company acquired SCM Connections, a leader in technology-enabled supply-chain transformations. The acquisition will strengthen Mckinsey’s supply-chain transformation capabilities, whilst expanding SCM’s footprint to serve more clients at greater scale.
Management consulting encompasses governance, risk and compliance, operations, organisational consulting, IT and technology, and ESG and sustainability. Services can range from due diligence and supply chain advice to data analytics, talent management and net-zero strategy.
The main areas expected to support growth included digital transformation, technology, cost reduction, cybersecurity, sustainability and the transition to net zero.
Valuation drivers include the experience of the management team, the quality and diversity of the client base, specialist knowledge, market positioning, technological capabilities, income diversification and the presence of recurring revenue.
The April 2023 whitepaper showed public UK management consulting businesses at current multiples of 1.61x revenue and 14.7x EBITDA. Private businesses were shown at indicative ranges of 1x to 2x revenue and 5x to 7x EBITDA.
The whitepaper identified higher valuation premiums for firms with specialist service offerings or differentiated geographic coverage.
Acquisitions can provide an efficient way to enter new markets, extend geographic reach and add specialist expertise without developing a new practice from the ground up.
The selected transactions featured consulting businesses operating in insurance and regulatory advice, ESG and sustainable real estate, and technology-enabled supply chain transformation.
