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FM digitisation set to 'transform' the industry

11 March 2019

With record numbers of acquisitions in the FM sector last year, BDO has also included predictions for the market's future in its annual review.

Managing director and head of Facilities Sector, M&A Advisory Satvir Bungar MBE drew attention to the "intensifying demands and sophistication amongst businesses in procuring FM services" in his introduction to the report.

He further stated that the aim to build long-term business relationships combined with the digitisation is likely to "transform FM in a marketplace where data is becoming the most valuable commodity".

With more than 520 merger and acquisition (M&A) deals completed since 2015, private equity investment has increased and the UK is continuing to attract global investment, according to BDO.

M&A deals are also an established growth strategy for FM businesses, with high levels of interest and "fierce" competition for innovative companies.

Among an extensive list of current trends, service providers that incorporate attributes such as transparency, proprietary technology, efficiency, self-delivery, agility, innovation, robust risk monitoring and many others can expect to attract premium valuations when selling or merging with others.

With annual numbers of M&A deals totaling 133 in 2015, 128 in 2016 and 124 in 2017, last year's figure of 143 resulted from an increase in activity in all four quarters and FM sub-sectors.

The percentage of deals conducted by trade acquirers has remained around 85% for the last three years compared to those completed by financial acquirers.

Although the Serco Group was recognised as achieving "significant improvement" in profitability, the report states that a number of larger FM companies are undergoing "transformation and turnaround plans".

Smaller FM service providers, such as Assist Group, were recognised as delivering successful business models due to clients seeking efficient and responsive services.

The Looking forward to a new world for facilities management 2019 report can be downloaded here.


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