Merger and acquisition activity among design consultancies is on the rise, industry deal-makers claim.
Deals are quietly being lined up as buyers and independent consultancies take advantage of favourable market conditions for the first time since the industry downturn six years ago.
‘Some consultancies are looking to get to a certain size to achieve critical mass, they have cash in the bank and they are looking to buy,’ says Willott Kingston Smith partner Amanda Merron. ‘Others are looking to sell while the market offers the chance of a favourable earn-out.’
Results Business Consulting managing director Jim Surguy agrees that there are likely to be several design acquisitions in the next few months, and says there is even evidence of deals without earn-outs.
Unlike previous periods of M&A, buyers are generally emerging from the ranks of small- to medium-sized ventures rather than the large marketing services networks.