Big Guns Aim For Consultancies
Professional services firms are active acquirers in the consultancy space, and the shareholders in Client Solutions had their reward when EY came calling in March 2022. Client Solutions was founded in 1994 and had 137 people on the payroll in FY21. According to the company, it supports clients to improve their operations and deliver quantifiable results such as increasing throughput and capacity, improving productivity, and reducing overtime.
Operating company Client Solvers (Holding) Ltd had turnover of €30.1m in the year to June 2021, up 18%, and booked an operating profit of €3.8m. Period end liabilities were €12.2m and net worth was €7.9m. The company had net operating cashflow of €4.6m, so a deal consideration north of €30m was likely. Client Solutions’ principal shareholders were James Eivers, Paul Hourican, Damian Maloney, Leo Murphy, Teddy McCarthy, and Declan Ballantyne, and there were 16 other shareholders listed in the latest annual return.
In FY21, Client Solutions’ largest revenue line was SAP installs and service (24%), followed by maintenance (23%), managed services (17%) and professional services (16%). The CCPC conduced a quick review of the deal and surmised that EY’s market share in IT consultancy would not exceed 15% in any potential market after the deal was finalised.
EY managing partner Frank O’Keeffe commented: “Clients are increasingly seeking guidance on how to innovate and transform their business models. Unlocking ingenuity and making change happen at an everincreasing pace is critical to how we serve our clients.”
Barry McCarthy, EY’s head of consulting, said EY has seen “incredible growth” across its consulting business in recent years. “We know that this acquisition will help to really drive that growth into the future,” he added. “We are very
excited too about the potential we see in us bringing the full suite of EY business capabilities to Client Solutions’ clients.”
In February 2022, KPMG also bulked up with the acquisition of KMCS, a leading construction project and cost consultancy established in 1954. Nigel Spence (62) was the sole shareholder in KMCS Ltd, and he stayed with the company after the deal went through. In 2017, Spence was joined on the KMCS board by Eileen Finn after cofounder Barry Keogh retired.
The company had 38 people on payroll in 2020, with a salary overhead of €2.8m. Total liabilities in December 2020 were €1.3m and net worth was €250,000. KMCS clients have included Facebook, Stripe, Primark, Westridge Real Estate, Riot Games and Fiserv. KPMG managing partner Seamus Hand commented: “As Ireland continues to attract high levels of foreign investment, this is a timely acquisition which will facilitate investors when considering the allocation of capital to investment in Ireland.”
Deloitte stuck to the financial knitting with the June 2022 purchase of Cahill Taxation Services in Ennis. Established in 2007 by Fergal Cahill (47), CTS provides a suite of tax consultancy services, spanning corporate restructuring, company and business sales, mergers and acquisitions, succession planning and revenue audits.
CTS Cahill Taxation Services Ltd booked a net profit of €220,000 in 2020 and had a net worth of €1.1m at year end. Trade debtors were €600,000 with long-term work in progress valued at €280,000 in the balance sheet. The company employed 12 people in 2020.
CTS was owned by unlimited company CTS Cahill Holdings, where Fergal Cahill owned 99% of the equity. Cahill’s reward was likely a seven figure lump sum, plus a tax partner role in the Deloitte Private offering. Deloitte said the acquisition would grow its Mid-West tax practice to 45 people and the local office to over 150 people.
Karen Frawley, Deloitte’s head of tax in the Limerick office, said: “Fergal and his team bring tremendous experience working with family-owned businesses and high-net-worth individuals. At a national level this enhances our position as one of the leading firms advising Irish-owned family businesses and private clients.”