Business Services M&A Trends 2023

Business Services

Market Trends

Unified Transformation
Organizations that have integrated agile capabilities, such as data accessibility and cross-functional collaboration, are better prepared for the future. Professional services firms should adopt a comprehensive approach to addressing clients’ needs throughout the entire value stream, from the initial request to final delivery.

 

Data Dominance
Investing in solutions that extract more meaning from available data is crucial. Platforms that enhance data by adding contextual metadata, including data origins, provide more valuable insights. Moreover, integrating data from various functional areas within the business offers teams the comprehensive insights needed to better serve clients.

 

Skill and Talent Optimization is Essential
People are the core of professional services firms, making it crucial to attract and retain the right talent. Firms must adapt to evolving employee expectations to avoid losing creative and dedicated talent to competitors.

 

A Human-Centered Strategy
As companies adopt new technologies, employees may fear job displacement. However, digitization can actually enhance team connectivity, insights, and success.

 

*Source: PwC – Professional Services Firms: A view from 2025

FCL Industry Coverage

  • Accounting, Audit and Tax Services
  • Buildings and Property Services
  • Construction and Engineering
  • Consulting Services
  • Cybersecurity and IT Management Software
  • Environmental Services
  • Education and Training Services
  • Legal Services
  • Media and Information Services
  • Outsourced Services
  • Security Services
  • Staffing

M&A Activity

Following a period of elevated M&A activity in Q1 2024, the business services sector has since experienced a sustained decline in deal volume of approximately 53%, totaling 6,618 transactions in Q2 2025. Venture capital deals continue to lead the market, comprising half of all sector transactions in the first two quarters of 2025. Median valuations have demonstrated significant growth over recent years, rising by 190% since Q3 2023. Despite a downturn in Q1 2025 attributed to geopolitical uncertainties, valuations rebounded sharply to a record median of $38.92 million in Q2 2025.