Listed consulting firms a standout beneficiary of the pandemic

14 May 2021 3 min. read
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Despite the challenges posed by the Covid-19 pandemic, large publicly listed consulting firms have been a standout beneficiary of the pandemic, according to a new report from Boxington Corporate Finance.

In its latest bi-yearly Consultancy Services Tracker, the international M&A advisory found that the consulting sector has gone from strength to strength over the past six months, with investors “very optimistic” about the sector’s prospects on the back of “surging client demand for Covid-driven change and transformation projects.”

Analysis of the market capitalisation of sixteen listed consultancies – including Accenture and Alpha FMC in the UK, Booz Allen Hamilton and FTI Consulting in the US, Capgemini and Wavestone in France and Infosys and Tata Consultancy Services in India – shows that valuations have surged by nearly 40% in the past six months (to 30th April 2021), and in some individual company cases even surpassing 70%.

Valuation Movements

Wavestone, which just snapped up a 25-strong consulting practice in the US, was the standout performer, with its valuation up by 70%, with three firms enjoying over 60% growth: Dovre, Capacent and Alpha FMC. Booz Allen was the slowest grower of the peer group, although it still managed to bump its market capitalisation by 6%. 

Tim Evans, a Managing Director at Boxington Corporate Finance, said the sector’s strong performance has been driven by two key factors. “Firstly, on-going demand for Covid-driven change and transformation projects from clients looking to respond and adapt to a post-Covid world, particularly in the area of digital and cloud.” 

“Secondly, the sector’s ability to transition to and maintain effective remote working, leading to high consultant utilisation rates and protected profit margins.” 

Strong M&A activity

Confidence in the sector is also reflected in merger & acquisition activity, which has remained extremely active over the past six months. According to’s database of notable deals, over 150 deals have been closed in 2021 so far, with the usual suspects of Accenture and the Big Four leading the dealmaking pack. 

Ebitda Multiple Movements

The largest deal was closed by Wipro, which acquired Capco in a $1.5 billion deal, although it could have been overshadowed by the mega-deal between Atos and DXC Technology, had the deal not fallen through after the Americans rejected the $10 billion bid put in by the French. 

According to Alex Cooper, Assistant Director at Boxington Corporate Finance, “buyers are increasingly searching for deals which give them niche, tech-enabled solutions, that can be used to deliver their traditional services and offer new, Covid-driven, related services.”

Looking ahead, Evans and Cooper said they expect deal activity in the consulting industry to remain at a high level, with technology capabilities the main driver. “We also expect buyers to continue to acquire for scale and international reach, particularly the mid-market players, although at a lesser pace than seen in previous years.”