Service Leadership
Total Profit Solutions for IT Companies™
Service Leadership Index™
- Q/Q Revenue Change - BIC Profitability SPs: Q1-09 16.1% Q2-09 168.3% Q3-09 -75.7% Q4-09 6.3%
- Q/Q Revenue Change - Median Profitability SPs: Q1-09 -38.4% Q2-09 15.4% Q3-09 32.3% Q4-09-22.9%
- Q/Q Revenue Change - Bottom 1/4 Profitability SPs: Q1-09 1.9% Q2-09 16.5% Q3-09 -42.5% Q4-09 20.7%
- Product GM% - BIC Profitability SPs: Q1-09 23.4% Q2-09 24.3% Q3-09 25.1% Q4-09 23.5%
- Product GM% - Median Profitability SPs: Q1-09 17.2% Q2-09 23.8% Q3-09 18.6% Q4-09 19.3%
- Product GM% - Bottom 1/4 Profitability SPs: Q1-09 25.1% Q2-09 27.9% Q3-09 15.5% Q4-09 10.8%
- Services GM% - BIC Profitability SPs: Q1-09 53.6% Q2-09 50.5% Q3-09 54.9% Q4-09 53.5%
- Services GM% - Median Profitability SPs: Q1-09 47.5% Q2-09 31.9% Q3-09 46.3% Q4-09 44.9%
- Services GM% - Bottom 1/4 Profitability SPs: Q1-09 41.6% Q2-09 38.7% Q3-09 44.1% Q4-09 36%
- SG&A% - BIC Profitability SPs: Q1-09 29.1% Q2-09 38.1% Q3-09 26.4% Q4-09 29.8%
- SG&A% - Median Profitability SPs: Q1-09 35.3% Q2-09 35% Q3-09 29.9% Q4-09 32.1%
- SG&A% - Bottom 1/4 Profitability SPs: Q1-09 42.8% Q2-09 35.7% Q3-09 39% Q4-09 46.3%
- EBITDA% - BIC Profitability SPs: Q1-09 17.7% Q2-09 13.6% Q3-09 21.9% Q4-09 16.5%
- EBITDA% - Median Profitability SPs: Q1-09 4.0% Q2-09 -1.8% Q3-09 6.9% Q4-09 4.2%
- EBITDA% - Bottom 1/4 Profitability SPs: Q1-09 -9.7% Q2-09 -14% Q3-09 -2.6% Q4-09 -16.6%
- Q/Q Headcount Change - BIC Profitability SPs: Q1-09 15% Q2-09 164.2% Q3-09 -71.4% Q4-09 0.9%
- Q/Q Headcount Change - Median Profitability SPs: Q1-09 -32.5% Q2-09 57% Q3-09 -41.9% Q4-09 -23.5%
- Q/Q Headcount Change - Bottom 1/4 Profitability SPs: Q1-09 12.2% Q2-09 62.3% Q3-09 -48.6% Q4-09 7.6%
Quarterly Solution Provider Performance
Buy an IT Solutions Company
Acquiring an IT Solutions company is one of the most impactful - and risky - ways to grow your company. Done correctly, you can add profitable revenue, get new customers to cross-sell your own services, and bring in valuable new capabilities and people. But it's often nearly a "bet-your-company" proposition.
Studies have shown that successful acquisition strategies focus on three critical success factors:
- The strategy and search: what to buy, how to structure the deal and how to find the right candidates.
- The valuation, negotiation and close: how to determine a value and deal structure that is compelling to both companies, and bring the transaction to a close.
- The integration: how to integrate the two companies after the deal is done.
Service Leadership - unlike most M&A advisors - brings unique experience in both phases. Since 2000, we've led or advised on more than 62 successful acquisitions/integrations of IT Services companies.
The Strategy and Search
We've built, run and advised on just about every kind of IT Solutions operation. So we know which services complement each other in terms of customer segments, skills and abilities of the people, customer segments and profit models. This is critically important in developing your acquisition strategy, because adding the right services, customers and people means the difference between creating long-term synergy or long-lasting problems.
We also know how to find the right kind of company, and how to structure a win/win deal. Utilizing BestProspects™, our constantly-updated, proprietary database of over 16,000 IT Services companies in North America, we deliver better M&A search results more efficiently than traditional search methods.
The Valuation, Negotiation and Close
Understanding the best- and worst-case value that an acquisition can bring to the Buyer requires a detailed understanding of how Solution Provider companies generate value and operate after they are brought together. Building a mutually compelling deal structure protects both parties from the worst case and provides both parties with optimum rewards for the best case. Service Leadership has long experience at determining what value is added by the assets and what value is added to the asset by the Buyer, and recognizing those contributions in negotiating a deal structure that brings both parties to the table and the transaction to a successful close.
The Integration
Few M&A advisors actually bring industry experience to the table. So they leave you on your own during the most crucial part of the process: trying to bring the two companies smoothly and successfully together, retaining the best of both while still realizing the desired financial gains. In a timeframe that is all too short, you must continue to serve your customers and their customers, all the while transitioning operating procedures, pricing models, customer contracts, compensation plans, human resources and so on.
Only Service Leadership brings the relevant experience to the table. Since 1983, we've been leading, advising or participating in the acquisition integration process. For the first 18 years, we were managers in companies on the buying or selling side of acquisitions, responsible for making the two companies work together after the deal closed. For the last eight, we've done the same as consultants. So our knowledge of integrating acquisitions comes from the inside out, and in that, we are unique in the Solution Provider M&A business.