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Size Analysis: In the industry, the total market capitalization reached $905 billion, indicating a slight decrease over the prior quarter. However, this growth was accompanied by some companies exiting the space. Despite a decline in the number of transactions throughout the year, the total transaction value saw a decrease, amounting to $22 billion.
Public Market Dynamics: Both the industry and the top 20 companies within it trailed the SPY, but during the quarter, they closely mirrored its trends. In contrast, the bottom 20 significantly lagged behind the benchmark. The capital structure median experienced a slight decrease, moving from 20.52% debt to equity to 20.99%, while the interest-to-revenues ratio remained unchanged. Overall revenue increased slightly quarter over quarter, although the net profit margin declined slightly. Gross profits increased, but operating expenses relative to revenue also rose.
Transaction Trends: During the quarter, there were a total of 631 transactions with a cumulative value of $21 billion. Notably, the highest number of transactions occurred in Data Processing and Outsourced Services, followed by Human Resources and Employment Services. Although the number of transactions declined compared to 2023 Q1, there was a lower proportion of private placements relative to public offerings. Overall activity in M&A, private placements, and public offerings declined over the past quarter.
Dispersion Insights: The primary contributors to revenue remained North America, followed by Europe and Asia. North America led in M&A transactions with 138, followed by Europe with 104 and Africa with 70. A similar trend was observed for private placements and public offerings, where North America recorded the most activity, followed by Asia.
We screened CapitalIQ using its industry classification. Transactions were filtered by announce date within the last 3 years. Companies were filtered by having a public company type. The main industry selected was "Industrials". CapitalIQ sector "Professional Services" was used to screen the database. CapitalIQ subsectors "Human Resource and Employment Services", "Research and Consulting Services", and "Data Processing and Outsourced Services" were used as categories. Our sectors were defined by keywords from the CapitalIQ market intelligent industry classification.
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