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W O R K P L A C E F U T U R E S THE CRYSTAL February 12 th, 2012 With thanks to our sponsors.

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Presentation on theme: "W O R K P L A C E F U T U R E S THE CRYSTAL February 12 th, 2012 With thanks to our sponsors."— Presentation transcript:

1 W O R K P L A C E F U T U R E S THE CRYSTAL February 12 th, 2012 With thanks to our sponsors

2 Richard Holden Facilities Management - Global M&A overview 12 February 2013 Strictly Private and Confidential

3 Overview – 2 – 1Overview 2The impact of M&A on the evolution of FM models 3FM development worldwide 4Top ten global FMs 5Industry trends 6Accessing emerging markets 7Valuing FM 8Recent M&A activity 9Prospects for M&A and the industry

4 The impact of M&A on the evolution of FM models – 3 –

5 FM development worldwide – 4 – Further consolidation to come

6 Top ten global FMs – 5 – Source: Catalyst Corporate Finance, Capital IQ

7 Industry trends – 6 – TrendImplication  Delivery models continue to evolve  bundling of services  increased self-delivery  proportion of TFM growing  Investment in skilled management  Investment in systems and processes  Acquire capability/delivery  FMs seek to move up value chain  adding specialist services  delivering solutions  Protect margins and retain customers  Acquire technical/specialist capabilities  Costs are less transparent  Resilient end verticals targeted  e.g. healthcare, pharma, defence  Focus on quality of service  More entrenched relationships  Higher risk?  Polarisation of market participants  where have the mid-tier gone?  Difficult to exceed £100 million revenues

8 Accessing emerging markets DriversMarket entry strategiesChallenges  Low growth domestic markets  Follow customer  Immature service cultures  Multinational customer demand  White collar/managed service  Lack of sophistication of clients  Maintain growth trajectory  Joint venture with local partner  CSR/corruption  City/shareholder pressure  Acquire  Language, distance, culture – 7 –

9  Global composite index of listed companies  Different valuation metrics for SMEs  technical/specialised services  commoditised lowest price services – 8 – Valuing FM Property Management Support Services Construction Source: Capital IQ

10  Global deal volumes increasing  Domestic consolidation underpinning volumes  Cross-border deals proportion growing  Increased focus on ‘4 th Wave’  Private equity – time for exits? – 9 – Recent M&A activity Source: Capital IQ

11 Prospects for M&A and the industry – 10 – +-  Continuing outsourcing trend  Low core organic growth rates  Stable economy?  Basic services more commoditised  SME consolidation in less developed markets  Lack of good quality acquisition targets  Rising valuations in emerging markets – scarcity value  Large PE exits on horizon Deals expected to continue, but it is firmly a buyer’s market

12 award winning international corporate finance advice London 5th Floor Grosvenor Gardens London SW1W 0DH Tel: +44 (0) Birmingham 9th Floor, Bank House 8 Cherry Street Birmingham B2 5AL Tel: +44 (0) Nottingham 21 The Triangle ng² Business Park Nottingham NG2 1AE Tel: +44 (0) Finland France Germany Hong Kong India Italy Japan Luxembourg Mexico The Netherlands Norway Poland Russia Singapore South Africa Sweden Spain Turkey UAE UK USA Australia Belgium Brazil Canada China Colombia Denmark – 11 –

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