Major public equity indices increased in Q3 2024, up 5.4% quarter-over-quarter and up 32.8% year-over-year. Leading economic indicators increased during the quarter, mirroring the positive sentiment around continued rate cuts but remaining somewhat subdued due to uncertainty in the U.S. political climate.
Valuation multiples within the Professional Services sector decreased by 8.6% in Q3 2024 from the previous quarter. However, the sector experienced year-over-year increases of 11.7% which, although below major market indices, is expected to experience a reversion to the mean in the coming months.
Volatile equity markets and tightened credit availability have tempered M&A activity in the overall market. However, the ample supply of cash and equity capital will continue to serve as a catalyst for M&A, with both corporate and private equity buyers competing for high-quality assets. Entering Q4 2024, market indicators predict that transaction activity in the Professional Services sector will catch up to the broader market.
BGL’s Quarterly Professional Services Update highlights public company operating metrics and M&A activity in the Human Resources Outsourcing, Contact Center Services, and Fixed Asset Management subsectors. BGL remains committed to informing clients of the current state of the Professional Services market and is always available to discuss appropriate M&A strategies and financing alternatives with its clients and prospects.
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