PA Consulting aims to grow into £1 billion firm by 2024

PA Consulting Group has announced a record fee income of £500 million. As the firm looks to the future, and the installation of new boss Panos Kakoullis, PA plans to double its revenue in the next five years.

PA Consulting’s rapid growth path first picked up pace following a landmark investment from The Carlyle Group, a global private equity firm which took a 51% stake in the global management and technology consultancy in September 2015. 

With the private equity investment, PA Consulting managed to turn around a period of dropping revenues. In the two years following the financial crisis, PA’s turnover had dropped by 25%, and while the firm managed to return to growth between 2010 and 2015, its revenue at the time of the transaction was still around £20 million lower than that at its peak in 2008, at around £440 million.

While much of the growth under Carlyle was booked organically, acquisitions also played a role. In the past three years, PA Consulting bought consumer insights company Sparkler, digital experience and design firm We Are Friday, aviation consultancy Nyras, and, in the US, the innovation strategy and product design business Essential Design and the specialist growth strategy firm 4iNNO.

In its latest financial year, the UK-origin consulting firm grew its revenue by 10% to £500 million. 2020 represents a crossroads for the firm, however. It appears Carlyle is likely to exit the firm, as it typically does in 4-6 years through all of its investments, to maximise its return. If that happens, then the firm has already stated it would prefer to remain in the hands of private equity. 

Alan Middleton, PA’s out-going CEO said, “PA’s preference is to seek future investment in a similar private equity type structure. This will enable PA to remain an independent consulting business and to continue to deliver great outcomes for clients and offer great career opportunities for its people.” 

Together with Carlyle, PA’s management has initiated the stages of this process, though which parties have been approached or shown interest have not yet been unveiled. What is known is that the new owner will have to support bold growth ambitions. PA wants to join the £1 billion club by 2024, alongside the likes of Kearney, Roland Berger and Strategy&, which generate revenues of just over the £1 billion mark. 

Middleton, who in the coming months will pass on the baton to Panos Kakoullis, said, “PA’s clear purpose and strategy has put the firm on an accelerated growth path, delivering ahead-of-market performance. We’re perfectly positioned to deliver on our ambitious growth plans, through bringing ingenuity to life for our clients and our people.”