IT and professional services M&A
In a services business, the people are the product.
Utilization, attrition and client concentration decide what an agency or consultancy is worth. The services pack measures them from timesheets and contracts — in aggregate, with people data protected.
Planned. Industry packs are built only after the software baseline is proven with pilot customers, in the order shown. A design partner in this sector can help shape the pack.
Where these deals go wrong
Steady roll-up activity by private equity and strategic acquirers in services businesses.
Utilization measured by optimism
Billable hours in the management pack rarely match the timesheets.
Attrition after the announcement
Key people leave when a deal closes, and revenue follows them.
Two clients, most of the revenue
Concentration and contract terms decide how durable revenue really is.
The questions that decide the deal
- Are the people billable, and is utilization what management says?
- How fast do people leave, and what does the bench cost?
- How much revenue sits with the top clients, and on what contract terms?
How a it and professional services deal would run
An illustrative walk through the decision loop once the pack is built.
01 · Evidence
Timesheet and professional-services data, client contracts and the financials.
02 · Finding
Utilization, bench cost, attrition and concentration findings — reported in aggregate, never as rankings of people.
03 · Review
Reviewers decide each with its evidence in front of them.
04 · Valuation
Earnings-quality adjustments for people-driven revenue run in the same engine.
05 · Deal terms
Earn-outs, retention arrangements and price adjustments tied to the findings.
What it finds — and what that becomes in the deal
Illustrative examples of findings and the terms they turn into. Every real finding carries citations and a named reviewer.
- High severityExample
Utilization below the level the plan assumes
Timesheets against reported utilization
Earnings-quality adjustment
- High severityExample
Largest client terminable for convenience
Clause cited from the master services agreement
Earn-out linked to renewal
- Medium severityExample
Rising attrition in delivery roles
Aggregate headcount movements
Retention plan in the first 100 days
What carries over from the core
These parts of Pactlab apply to the sector as they are.
Client concentration
Top-client revenue share uses the existing concentration analysis.
Key-person risk
Dependence on senior people, in aggregate and with people-data protections.
Contract review
Master services agreements, durations and termination terms with citations.
What the industry pack adds
New sources, finding types and valuation inputs — plugged into the unchanged core.
Utilization
Billable utilization from timesheet and PSA evidence.
Attrition and bench cost
Attrition and bench findings, reported in aggregate.
Earnings quality
Earnings-quality adjustments for people-driven revenue.
What you walk away with
Utilization you can defend
From timesheets, not from the management pack.
Client concentration and terms
Who the revenue depends on, and how it can end.
Quality-of-earnings adjustments
Applied to the valuation with their basis stated.
Questions buyers ask
Can we use Pactlab for a professional services deal today?
The professional services pack is planned, not built. Pactlab is proving its software baseline with pilot customers first. If the target has a software business, the software modules apply today — and design partners in professional services help decide what the pack reads and checks first.
How is people data handled?
In aggregate by default. Named and compensation data stay gated and audited, and are never sent to a model — the same rules as the rest of Pactlab.
Buying in it and professional services?
Design partners in this sector help decide what the pack reads and checks first. Talk to us.