Front Line Insights

Statistical analysis and insight into activity and trends in M&A and capital markets.


Technology Enablement Continues to Reshape Commercial Services

Acquirers are paying strong multiples for companies that are using technology to rethink and optimize how traditional commercial services are delivered.

Tuesday, October 18, 2016

Acquirers are paying up for companies that are using technology to rethink and optimize how traditional commercial services are delivered.

Over the past decade, the pace of technological disruption has accelerated in many industries, including commercial services. Five years ago, building security and maintenance, equipment repair, routebased, engineering, and many other commercial services would have been largely off-the-radar for Silicon Valley. But today the delivery of these essential, mission-critical services is being altered and streamlined by technology in ways that could not have been imagined even a few years ago.

The use of data analytics, route-optimization software, and other technology is reshaping the commercial services industry, and this is directly affecting much of the M&A activity in the space. Buyers are paying attractive multiples for companies that are using technology-enabled solutions to operate more efficiently or to create disruptive models for how services are delivered.

Through September, there have been 668 completed M&A transactions in commercial services totaling $79.3 billion, according to Dealogic. This nine-month deal value already exceeds the full-year totals of the previous nine years and puts 2016 on pace to be the highest transaction value year on record in commercial services. Strategic acquirers have accounted for 84% of this activity in 2016, and this aligns with what we at William Blair have seen in recent deal processes.

The competitive M&A landscape in commercial services is also affecting the way buyers evaluate target companies and act within sales processes. In this report, we examine important trends that are shaping deal-making activity in commercial services in 2016.

Highlights include:

  • Future acquisition opportunities become key value driver in M&A processes
  • Strategic and financial buyers making quick decisions—then acting decisively
  • M&A and public comp stats from across commercial services

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