Business Services

Deals Activity: Moderate

Restructuring Activity: Moderate

Cost cutbacks present opportunities and challenges for business services suppliers.

Deals activity in Business Services

  1. 1. Deal volumes remain steady, driven by consolidation of smaller operators.
  2. 2. We expect operators to continue seeking out M&A opportunities to improve competitive position and increase market share.

Restructuring activity in Business Services

Business Services have seen a high level of restructuring activity in recent years as the pandemic transformed the business plans of many operators.

The sector is likely to continue benefitting from businesses seeking to outsource in order to reduce fixed overhead costs.

Labour costs and availability continue to place operational constraints on the sector.

Business Services

The economic slowdown brings opportunities and challenges for business service providers.

Corporates taking a tighter control over expenditure may reassess the services they contract out, undertaking retendering exercises or reducing the service levels required. There is also the risk increased business failure could lead to a rise in bad debts, worrying firms that are relatively highly concentrated.

On the other hand, an overhaul of corporate operations may create opportunities, as businesses seek to outsource certain activities or hire third-party suppliers to improve service. Agile and aggressive providers may find an opportunity to consolidate their market position, either through M&A or keen pricing strategies.

Business service providers also need to carefully manage their own costs and overheads. Various COVID support loans will need repaying in the months and years ahead, placing a further squeeze on liquidity.

Find Your Expert

Rick Harrison is Interpath Sector Lead for Services which includes Business Services as one of two core segments. For a full list of our senior people with experience in this sector use the button below.

Our senior team