Global Overview
The illustrations below highlight recent publicly disclosed Global M&A activity within the Commercial and Professional Services industry over the last 5 years from 2020 to 2024.
In line with overall M&A activity across the period, the Commercial and Professional Services Industry saw a 22% jump in transaction volume in 2021 as pandemic enforced economic downturn in 2020 forced many companies to rethink their business models, leading to a wave of restructuring, mergers, and divestitures as companies sought solutions to speed up the adoption and integration of digitization and automation. The pandemic had a material impact on the workforce regarding attitudes toward the gig economy, working remotely, and the prioritization of work life balance. These evolving multifaceted labour dynamics have seen companies face stronger competition for talent and have forced businesses to seek cost optimization and operational efficiency through outsourcing and offshoring of non-core functions. From a peak in 2021, as prevailing macroeconomic conditions of higher inflation and rising capital costs made concluding transactions more difficult, industry M&A deal volume and transaction values have been following a downward trajectory. With global M&A activity falling in 2024 to below pre-pandemic levels as companies prioritized long term revenue visibility, cash flow security, and sustained market growth prospects.
Global M&A transactions
Remaining constant over the period, due to their mature service industries, established regulatory frameworks, and strong capital markets, most M&A activity took place in the US (45.3%) and Europe (39.9%) in 2024. Highly developed consulting, legal, outsourcing, and financial services markets, make consolidation and expansion in these regions through M&A more attractive.
Influenced by economic shifts, technological innovations, and changing consumer preferences, the Consumer and Professional Services industry is dynamic and continually evolving. Comprising a diverse selection of sub-sectors, such as companies providing research, consulting, data processing, outsourcing workforce solutions, facilities management, and security services. The sub-industries’ contribution to M&A remained consistent over the period, with Research and Consulting Services (35.8%), Environmental and Facilities Services (19.2%) and Diversified Support Services (18.5%) accounting for most of global M&A activity combined in 2024. The demand for strategic advisory services in ESG and regulatory compliance has surged, prompting an increasing percentage of transactions in the Research and Consulting Services Sub-Industry which has grown from 31% in 2020 to 35.8% in 2024. The Commercial and Professional Services industry comprises of 7 sub-industries detailed in the table below.
Environmental & Facilities Services
Companies providing environmental and facilities maintenance services.
Office Services & Supplies
Providers of office services and manufacturers of office supplies and equipment, not classified elsewhere.
Diversified Support Services
Companies primarily providing labour-oriented support services to businesses and governments.
Security & Alarm Services
Companies providing security and protection services to business and governments.
Human Resource & Employment Services
Companies providing business support services relating to human capital management.
Research & Consulting Services
Companies primarily providing research and consulting services to businesses and governments, not classified elsewhere.
Data Processing & Outsourced Services
Providers of commercial data processing and/or business process outsourcing services.
Commercial Printing
Companies providing commercial printing services.
The continued decline in total global transaction volumes and values in 2024 has also been reflected in the number of mega-deals (i.e., deal values above R10 billion/$530 million) decreasing by 5% from the prior year and completed mega-deal value decreasing from R1.29 trillion/$69.6 billion to R649 billion/$34 billion. Interestingly, the sub-industries’ contribution to mega-deals is, however, dislocated from the Global figures with Environmental and Facilities Services (29%) being the main contributor due to the emphasis that large and listed businesses have on ESG compliance and regulations, driving up the valuations on these targets. Human Resource and Employment Services (24%) and Research and Consulting Services (24%) were the other major contributors mega-deal M&A activity in 2024. Unsurprisingly, geographic contributions to mega-deal transactions were primarily from North America (48%) and Europe (24%) in 2024. Some of the Notable mega-deal transactions from 2024 included –
2025 Global Outlook
Although following a negative trend over the past 3 years, the outlook for Global M&A activity in the professional services sector remains positive as firms in consulting, accounting, and outsourced business services remain in high demand. An integral part to the outsized growth in transaction volumes in 2021, Private Equity interest in high-margin advisory and financial consulting firms is rising, having previously prioritized industries that offer automation, efficiency improvements, and scalability, enabling higher margins and long-term growth without significant increases in labour costs. This interest from financial players will be further buoyed by stabilizing and declining interest rates, making leveraged buyouts and acquisitions more attractive. Global M&A activity in the Commercial and Professional Services industry is expected to recover in 2025, with robust deal flow driven by digital transformation, consolidation, and evolving regulatory landscapes, as strategic and financial buyers continue playing a pivotal role, with technology and ESG compliance serving as key acquisition themes. However, persistent economic uncertainty, valuation mismatches, and regulatory complexities may temper deal activity in certain regions. While mega-deals in the sector may remain subdued, mid-market and niche acquisitions will likely drive most of the M&A momentum in 2025, particularly in outsourcing, technology-driven consulting, and regulatory compliance services.
Key Drivers
Evolving Client Needs and Outsourcing Growth
Companies are increasingly outsourcing non-core functions such as HR, finance, and IT support, driving demand for business process outsourcing (BPO) firms. Clients are demanding integrated, multidisciplinary solutions, leading firms to acquire complementary service providers.
Post-Pandemic Recovery and Resilience Strategies
The pandemic accelerated workplace transformation, digital consulting, and remote service delivery, creating demand for advisory firms in these areas. Firms are acquiring HR, payroll, and remote workforce management services to adapt to new labour market trends.
Cost Efficiencies and Operational Synergies
Companies are merging to reduce overhead costs, optimize operations, and streamline service delivery. Back-office functions such as finance, HR, and IT support are being consolidated post-merger to drive efficiency gains.
Increased Specialization and Niche Services
Niche expertise in high-demand areas (ESG Compliance) is driving M&A activity.
African Overview
The illustrations below highlight recent publicly disclosed African M&A activity within the Commercial and Professional Services industry over the last 5 years from 2020 to 2024.
M&A activity in Africa’s commercial and professional services sector remains dislocated from global trends due to fragmentation and regulatory complexities. Unlike in North America, Europe, and Asia-Pacific, where large multinational firms drive consolidation, Africa’s market is dominated by smaller, independent businesses with lower demand for large-scale acquisitions. The sector also faces slower digital adoption, reducing the incentive for technology-driven M&A, which is a key driver globally. Additionally, inconsistent regulations, currency volatility, and political uncertainty create challenges for cross-border deals, further limiting large-scale consolidation. In 2024, Africa’s share of global M&A transactions in the Commercial and Professional Services industry accounted for approximately 0.49% of total global transaction volume, portraying the region’s unfavourable conditions to M&A activity. Notably, 2021 was a disappointing year for transaction volumes in comparison to global transaction volumes.
African M&A Transactions
As with other industries, South Africa continues to be an outsized contributor to African M&A activity in the Commercial and Professional Services industry with Cross-Border transactions playing a significant role in driving deal volume. Private Equity involvement in transactions across the continent remains below levels seen globally. In 2024, Diversified Support Services (27%), Human Resource and Employment Services (27%), Research and Consulting Services (28%) sub-industries drove most African M&A activity. Notable African transactions in 2024 included –
2025 African Outlook
The outlook for M&A activity in the Commercial and Professional Services sector in Africa for 2025 remains cautiously optimistic, with deal-making expected to be influenced by economic stabilization, digital transformation, regulatory shifts, and evolving business models. With its rich blend of cultural diversity, skilled workforce, and developed infrastructure, South Africa has emerged as a burgeoning hub for Commercial and Professional Service business and is poised for substantial growth. Recently ranked as the 2nd preferred Global BPO offshore destination in 2020. For example, there are currently over 175 local and international BPO providers such as Teleperformance, EXL, WNS, and Webhelp operating in South Africa. Local players typically serve large multinational customers and deliver clear value by driving lower operational costs and increasing the quality and efficiency of business processes.
Offering quality services at competitive prices, South Africa stands out as a cost-effective alternative to traditional outsourcing destinations. Lower operational costs without sacrificing quality make it a lucrative investment choice. With 60 000 relevant degree holders available for hire at the entry level every year. South Africa’s educated workforce, proficient in English and multiple local languages, positions the country as an attractive destination for services businesses. English-speaking countries including the United Kingdom, United States, Canada, Australia, New Zealand and Ireland are key markets for South African providers. South Africa’s advantageous time zone aligns well with European markets, facilitating real-time collaboration and seamless customer service. This alignment opens doors to diverse markets, maximizing reach and efficiency.
Let us guide you
With renewed interest from both international and local players, M&A activity within the Commercial and Professional Services industry is expected to rebound. Should you be looking to Raise Capital, bring on a Strategic Equity Partner, or make a Full or Partial Exit, we are well positioned to assist you in reaching your strategic goals and achieving the best outcome.
As leading corporate advisor since 2002, we are advising on various transactions in this space and through our proprietary sell-side process have successfully guided Innovation Shared Services (ISS) on their sale to Manuclox which was recently completed in November 2024.
