Q2 2023 Business Services Industry Update

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GCG’s Q2 2023 Business Services Industry Update provides an overview of the latest trends in the sector, including recent performance, valuation multiples, and the state of the middle-market M&A environment.

Key findings include the following:

    • In Q2 2023, public equities across most segments of the Business Services sector that GCG tracks continued to outpace the broader U.S. equity market, demonstrating the high demand for critical outsourced services, and resiliency they have throughout the economy.
    • On a 3-year period ending June 30, 2023, the S&P 500 has returned 42.2%. Segments such as Infrastructure Services, Environment & Waste Services, and Facility Services were among the leading performers, returning 154.9%, 76.5%, and 71.1%, respectively.
    • The volume of M&A activity in the Business Services sector declined during Q2 2023, with 123 deals closed, versus 142. Despite the decline in deal volume, there was a notable increase in the average deal value for transactions with reported values, which rose by 55.9%.
    • Trading multiples varied significantly across and within the six categories, with the strongest multiples observed in the Environmental & Waste Services and Residential, Commercial, and Industrial Services categories with average EBITDA multiples of 13.4x and 13.1x, respectively.

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