Henrik has kindly agreed to share his experiences of working as an intern at Armstrong.  

Tell us a bit about how you came to be at Armstrong? 

I’m going into my third and final year at Cardiff university. My background is very tech-focused. I’ve studied computer science from GCSEs through to university and previously completed an internship working in IT.  

I discovered Armstrong through a student opportunities channel on my universities Teams site. I saw that the role would allow me to work with AI and get an insight into the financial services industry, so I eagerly expressed my interest, attached my CV and sent my application in. By complete luck, the Finance society I’m a member of had an event scheduled in collaboration with Armstrong, I went along, met a few members of the team and had my interviews soon after. 

 What types of projects are you working on?  

I’m working on improving Armstrong’s internal technology and I’ve enjoyed this because my objectives are functionality. This means that I’m free to use whatever tools are useful to me and this has allowed me to work closely with the most advanced tools in the AI space from the likes of OpenAI and Anthropic. Additionally, the experience has helped me understand where tech fits into a commercial environment and where my skills can be of use. 

 Anything you would do differently next time? 

Absolutely, in September I’m going to start listening to my lecturers more intently. The most important technical lesson I’ve learned at Armstrong is how to apply theoretical lessons to a practical setting. Before starting I strongly believed practical skills were much more important than theoretical ones. Now I understand that both are equally as important. 

What advice would you give to someone thinking about working in software development and / or doing an internship? 

I think the best thing is to have a little bit of knowledge about many different things. Software development is all about finding the right answer, so knowing the first step in finding the answer is the most important. Also, I think that AI is something to embrace rather than shy away from, it’s unbelievable the amount of time ChatGPT has saved me.  

In terms of anyone doing an internship I would try and understand what you want to get out of your internship and focus on that. 

You can find out more about working at Armstrong here or speak to a member of the team.  

Armstrong provided sell-side due diligence to Technology Services Group (TSG) on its MBO to Pictet Alternative Advisors (Pictet). 

Founded in 2003, TSG is a national, fully integrated cloud-first Microsoft digital transformation and managed services provider. With offices in Newcastle, Glasgow and London, TSG employs approximately 250 highly accredited people, targeting mid-market and ambitious small and medium enterprises across the public and private sectors. 

Pictet, the alternative investment business of Pictet Group, manages investments in private equity, private credit, hedge funds, and real estate assets for both private and institutional clients. 

The acquisition will allow founder shareholders to exit and the management team to accelerate its growth plan (organically and inorganically) as it enters a new phase of expansion. 

Armstrong’s full scope CDD work included in-depth interviews with TSG’s key clients and partners, detailed analysis of its addressable market, competitive environment, staff & talent pool, historical performance and a detailed review of its business plan. 

Mike Callow, Partner and Head of Technology at Armstrong, said: “TSG is a great business with an impressive management team that are building a top-class channel partner in the Microsoft ecosystem. We really enjoyed working with Rory, the rest of the TSG team and Lincoln on this engagement and look forward to seeing the business continue to succeed on the next stage of its journey.” 

Rory McKeand, CEO at TSG, said: “We enjoyed working with the Armstrong team, the depth of their analysis, quality of their interviews and their knowledge of technology services and Microsoft channel gave us a comprehensive report, helped us through the deal process and provided insightful recommendations to refine our strategy and how we are executing it.” 

If you are interested in talking to Armstrong about opportunities in the technology sector, please contact:  

Mike Callow

mcallow@armstrong-ts.com
+44 7894 594 500

Email Mike

Ifan Dafydd

idafydd@armstrong-ts.com
+44 7792 158 738

Email Ifan

Competitive socialising brings together activities such as tenpin bowling, crazy golf and darts in an immersive and contemporary environment. Increasingly, innovative offerings such as racing car simulators and social cricket are used to complement traditional activities and help maximise spend per head. Continued growth in the sector reflects the ongoing shift of consumer leisure spend away from traditional bars and clubs. Assets are coming to market and growth potential means they are often highly attractive for mid-market investors. 

A positive market in a challenging sector 

The sector has proven to be demand resilient (and growing) and supply-side dynamics are positive given a) the availability of large vacant spaces and b) the perception these businesses drive footfall for other retail/leisure spend. Many operators are also focusing on extensive food and beverage options alongside these activities, which is proving valuable. 

New site openings (domestically and abroad) clearly present the most significant opportunity to accelerate growth, but increasing utilisation, average spend per head and repeat visits are all key metrics and additional levers. 

Stay close to customers 

Effective marketing can be challenging; individuals booking on behalf of groups and a high number of walk-ins (vs online reservations) can result in a scarcity of customer data. Actively tracking preferences through dynamic feedback, health and safety forms and leveraging the shift towards online bookings are potential tools to inform marketing strategies. Clear evidence of tracking (and acting on) performance across channels (e.g. socials, search, PR) will give investors the comfort that the opportunity is being maximised. 

Mix it up 

It is important to stand out in this market; while dynamics are positive, indirect competition will always be a challenge for leisure spend. Typically, multi-activity will perform better than single-activity (i.e. bowling + ping pong + gaming versus bowling only). This is because multi-activity attracts a greater number of customers and ensures interest and occupancy are sustained.

Speak to a member of the team about opportunities in the leisure sector.  

Jack Hibbs

[email protected]
+44 7883 296 346

Email Jack

According to KPMG’s PE mid-market report (January 2024), bolt-ons comprised 65% of deals by volume in 2023.

This figure is likely to be even higher in the industrials & built environment sectors considering the number of sub-sectors that are highly fragmented and ripe for consolidation, including TICC, facilities management and fire. Given the increasing importance of technology across numerous sectors (e.g. smart buildings, industrial automation), we are also likely to see bolt-ons to acquire or enhance tech capabilities.

From a CDD perspective, bolt-ons often require a shift in emphasis and prioritisation versus buyside CDD on platform deals. Full CDD may not be required, with areas such as customer referencing taking on greater relative importance versus areas like market sizing. Many bolt-ons are also too small or unsophisticated to track KPIs at a granular level or have a full 3-5 year business plan.

Armstrong’s industrials and built environment team has carried out CDD on 15+ bolt-on acquisitions since 2020. These have ranged from full-scope CDD to focused customer referencing or expansion strategy work.

Based on our experience, key considerations for investors and portfolio company management teams to consider when scoping CDD include:

• Why are we buying this business? Based on our investment thesis, what are the major gaps in our understanding of the target?
• How well do we already know the market? How close is the target’s market (sector, geography, products/services) to the ones we already serve?
• How many customers does the target have, and how comfortable do we need to be on the strength of customer relationships?
• How professionalised is the target? How well do they track their KPIs, and is detailed data analysis possible?
• Is the target’s business plan ‘diligence-able’, and if it is, then do we need to diligence it as part of our acquisition thesis?

We believe that any CDD should include a substantial customer referencing component, and that this should be the core module in any bolt-on CDD scope. Beyond this, more flexibility is required to choose the areas that are most suitable and useful for each case.

Speak to a member of the team about how to structure CDD for bolt-on acquisitions, and how we can help.

Matt McNally

[email protected]om
+44 7894 736 523

Email Jack

Brandon Matthews

[email protected]om
+44 7771 401 723

Email Brandon

What opportunities does the change of government bring to improve the go-to-market for high value B2G services, and what does good look like anyway? 

Armstrong use a maturity pyramid for assessing the attractiveness of a B2G services business and opportunities for value creation, as we discussed at our recent breakfast panel event, read our article here.

Each stage builds on the one before, breaking away from a procurement led approach (good for buying paperclips) towards outcomes focused, consultative selling, as a trusted advisor (the holy grail for high value service providers). 

Last week’s change of government – and the change in personnel and political priorities it brings – presents opportunities for companies to move to higher stages of GTM maturity and build value. But it takes time and effort. 

Opportunities at the base of the pyramid 

Most midmarket B2G businesses that we see are at stage 1 or 2 of the pyramid. This involves getting listed on appropriate frameworks/DPS and proactively monitoring and responding to tenders. These are the basics for any B2G business. 

Deeper analysis of procurement data (e.g. upcoming renewals) can help these businesses better understand where future demand will be, who they will be competing with, and position themselves appropriately ahead of time. But this only provides part of the story to move your business to maturity stage 3 – this is the point where businesses must invest hard in building deeper relationships with influencers and decision makers across their target departments and market segments. 

These influential decision makers value the expertise that service providers can offer and are typically much more open outside of a formal procurement process. With long term engagement, B2G businesses can begin to understand the outcomes that departments are prioritising, their challenges and constraints and propose novel solutions to overcome them. 

With this level of engagement, businesses can start to shape tenders before they are issued and can even generate new business opportunities proactively. These are the hallmarks of a trusted advisor and a GTM function that can be considered best in class. 

Different maturity stages within one business 

In many cases, we see that businesses have been able to move to a high level of maturity for one or two clients and/or departments but are viewed as stage 1 or 2 with others. This is the same for the range of services/products they offer. They may be viewed as a best in-class trusted advisor for one service, but lower down the pyramid for others. 

Identifying the growth opportunity 

There are some products/services (e.g. reselling products such as IT hardware & consumable goods or the basic outsourcing of commoditised services) that naturally limit how far up the pyramid you can go. For these businesses, the key question is can we add a consultative/transformational service wrap to our core offering that allows us to push up the chain? 

The size of the niche at its highest value point determines whether it has enough headroom for a company to continue growing there or whether it needs to expand into other areas. 

This is partly determined by what and where the niche is. For example, if the company is stage 4 or 5 for a particular NHS Trust, how can it build on these relationships to expand into other Trusts? How does it ‘jump the species’ into local authorities or higher education or into a devolved region? Or if the company is stage 4 or 5 for a horizontal specialism (network security), is there enough headroom there alone or are there opportunities to expand its offering? 

In any case, there are plenty of opportunities for PE investment to help B2G businesses successfully grow and move its go-to-market strategy up the value chain. 

Speak to the team 

For more information on this, and to discuss potential investment opportunities for B2G businesses across our core sectors, please get in touch with a member of the team. 

Ifan Dafydd

[email protected]om
+44 7792 158 738

Email Jack

The economy grew by 0.6% between January and March, but according to the latest ONS data, overall, UK vacancies are down. However, it should be noted there is significant variation between industries. We expect the focus of the new Government (whatever the colour) to be on skills, employment and productivity. What is less clear is the impact on the human capital sector; it’s too early to know.

Even in a poor macro environment, experience shows where firms need talent there will always be opportunities for specialist recruitment firms with deep sector knowledge to succeed. There will also continue to be opportunities to improve and streamline the recruitment process, particularly via technology.  

Regardless of the state of the economy, the key questions for investors when considering a recruitment business remain the same: 

• Does the target operate in attractive, candidate short end markets with growing, resilient demand and structural skills gaps? 
• Does the target possess deep subject matter expertise in its specific sectors and (ideally) sub-sectors? 
• Does the target have a strong set of ‘incremental differentiators’ that make it the preferred choice for its customers? 
• Do KPIs show low customer and fee earner concentration and clear evidence of strong, growing customer relationships? 
• Does the target successfully manage to attract, train and retain high-performing fee earners, and is the environment attractive enough that fee earners will stay rather than going elsewhere? 
• Does the target have a business plan which is based on more than just adding headcount?  

Speak to a member of the team about our views on the human capital sector.

Matt McNally

[email protected]
+44 7894 736 523

Email Jack

There are approximately 69,200 Chartered Surveyors working in the UK (Statista). Surveying practices cover a broad range of specialisations, ranging from quantity surveying and building surveying, through commercial and residential agency, to residential house surveys. Similarly, the size of practices ranges from global operations though to smaller local and regional players.  

Quality assets are coming onto the market, and we anticipate more opportunities for consolidation across the sector.  

I recently published an article on what is attracting investors to geospatial tech, read here. We’re seeing similar interest more broadly in surveyors who are taking advantage of emerging technologies (including 3D modelling (VR / AR), BIM tools and software, drones, AI architectural models etc.), automation in logistics, new building regulations and the impact of ESG on the property sector. 

I asked Peter Cookson a Chartered Surveyor (and our Managing Partner), what questions investors need to ask:  

• What is the range and specialisation of surveying services offered?  
• What does the M&A opportunity landscape look like in the sector, and how practical is a buy and build strategy?  
• Is growth forecast through new services in existing geographies, the same services in new geographies, or a combination of both? Is this realistic? How can the management team successfully navigate talent shortages to achieve their growth plan?  
• Does the back-office infrastructure support proposed growth and, if not, what needs to be built-out?  
• What impact will technological advancements (e.g. AI) have on the market?  

Get in touch with a member of the team about opportunities in the built environment sector.   

Brandon Matthews

bmatthew[email protected]
+44 7771 401 723

Email Jack

We provided transaction support to Inflexion and Cobepa as part of their investment.

Easyfairs, one of the world’s top ten events companies, currently employs 820 people across 20 offices in major European cities. It organises 110 event titles in 12 industry verticals, including packaging & logistics, manufacturing, industrial processing, hospitality and construction. The company welcomes more than one million visitors and 23,000 exhibitors to its events each year. In addition, Easyfairs manages multi-function venues in Belgium, the Netherlands and Sweden, which host both Easyfairs and guest events. 

The transaction will enable Easyfairs to drive faster organic growth through new event launches and geo-cloning of existing events, extend its geographic and sector footprint, enhance its position as a sector frontrunner in big data and artificial intelligence technologies, and unlock further strategic M&A opportunities. 

The transaction is expected to close by Q3 2024, subject to receipt of regulatory approvals. 

The Armstrong team supported Inflexion and Cobepa in furthering their understanding of Easyfairs’ portfolio, and used our extensive knowledge of the events sector to advise on the key areas to consider when making an investment decision. 

This is Armstrong’s first project in the events sector post-Covid. We hope it signals renewed interest in a sector with diverse opportunities.

If you are interested in talking to us about opportunities in the events sector, please contact: 

Mike McNally

mmcnally@armstrong-ts.com
+44 7894 736 523

Email Mike

The Government is committed to investing in digital transformation and a Labour government plans to go further and faster. But this will be against the backdrop of intense fiscal pressures, concerns over Labour’s proposed clampdown on consultancy spending, and greater scrutiny of value for money. 

For investors and companies navigating this space we co-hosted a breakfast panel with Flint to explore the changing environment for B2G tech and tech enabled services. On the panel were Liam McGivern (Managing Director at ICG), Mike Tattersall (Chief Delivery Officer at Hippo Digital) and James Snook (Director at Flint Global).  

Overall outlook for B2G digital/tech-enabled services spend

• From a macro view, overall demand for digital/IT services has remained steady with fairly consistent buying trends and a continuing stream of high value contracts coming to market. However, competition on tenders has increased greatly with more companies looking to enter the public sector market. 
• Both the Conservatives and Labour talk about a desire to reduce consultancy spend across government (not a new narrative). In any case this will not be possible for digital transformation (DX) due to the lack of skillset in-house and the expertise of third-party providers, which cannot be easily replicated in-house. 
• The expectation is that there’ll be continued resilience in DX spend, a largely apolitical issue due to three main outcomes: increased efficiency, improved cyber security and derisking. 
• We might see delays in procurement cycles and more scrutiny/bureaucracy on decisions with a new government looking to reduce consultancy spend. To get round that, companies should ensure they have a compelling business case and strong relationships with key decision makers.   
• It is also important to note that the consultancy narrative is a political issue primarily for central government departments and there are many public sector organisations where this isn’t the case, such as ALBs (Arm’s Length Bodies) – including many standalone service delivery bodies – as well as local government, the NHS, and emergency services.

Opportunities for UK SME and midmarket companies  

• There’s been a lot of change in government in the last couple of years (and more is expected regardless of the election outcome). New opportunities for companies often arise when key decision makers move around departments and like to bring their trusted partners with them.  
• Companies need to be on the front foot and really understand the agendas of both existing and potential governments to understand where they are prioritising spend and where DX opportunities could arise. For example, any Labour pledges around tax reforms or NHS improvements could provide opportunities for DX project work.  
• Tenders now talk about outcomes rather than products/services needed. For example, “our priority is to calculate the amount of time left on a prison sentence”. Companies responding to such tenders need to be proactive, strategic and demonstrate the ability to provide robust solutions to the problem that needs solving. 
• There is also an expectation that just meeting the scope of work’s criteria is not good enough, it’s about going above and beyond and being a trusted advisor, as is the case in the private sector. You don’t just want the client to be satisfied at the end of a project, you want them to feel delighted with the outcome. There is a lot you can do around the edges on a tender to do that: How many free days do we put in? How many training days should we add for the team?  

Working with government, departments and politicians  

• Government buyers place a high value on expertise – you can engage with them outside a tender process. If you ask the right questions and offer the right expertise, they can be very open on their priorities and problems. Being viewed as a trusted advisor with deep expertise, rather than a salesperson, allows you to build relationships/trust and shape the agenda without having them slamming the door shut citing ‘commercial sensitivity’. 
• There’s more of an open door than you might expect. Companies also benefit from the fact that political parties see it as far more important to sit down with UK headquartered SMEs and midmarket firms than with large offshore companies.  
• Politicians often don’t know the commercial solution to their goals/policies i.e. “this is what we need to purchase, implement and support to solve this problem”. They don’t have deep experience in the tech/product range out there and DX consultancies play a role in that. 
• Companies often come in and solve a very specific piece of work with a fixed outcome from a tender that was decided a long time ago. Those that excel are the ones that lean into policymakers and look at what else they can do to help, continuously building those relationships. Taking a research-based approach can help, finding out what bugbears end users have then reverting that back to policymakers with solutions. Policymakers and end users are typically quite far apart, and a good DX firm bridges that gap. 
• Unlike the private sector, budget lifecycle is very strict in the public sector. You need to be having conversations with budget holders at exactly the right time in the financial/budget lifecycle. For example, trying to speak to a department in June, when their budget was set in February is unlikely to lead to anything. Being part of continuous conversations with departments allows you to know exactly when budgets are being set and decisions are being made. 

Being deeply embedded within departments is key 

• B2G GTM/sales models are different from private sector models and need to be assessed on a different set of criteria. 
• For example, having customer (i.e. department) concentration can be positive for firms servicing the public sector. This is counter intuitive for investors who typically view customer concentration as a bad thing. Seeing a company that derives 60-70% of revenue comes from just one department (e.g. The Home Office) can look worrying on the face of it but highlights that it is the go-to DX provider for that department. In contrast, a company that has a low share of wallet across multiple departments would suggest that it was only at the edge of those departments and not the go-to provider (which is likely to be a hard to displace competitor). 
• The sheer size of some departments should alleviate any concerns around spend, for example the Home Office in 2022-23 had a total budget of c.£20bn, greater than the entire GDP of Jamaica (c.£13bn 2022). 
• That said, there are opportunities to sell cross-departments e.g. where your solution is ‘horizontal’/technical in nature (e.g. secure by design, managed firewall etc.), or where the problem you’re solving crosses multiple departments, for example a strong NHS DX provider could enter the Department for Education as child healthcare sits within the DfE. 

The Procurement Act  

• The Procurement Act is a legislative milestone that’s been years in the making. It’s about how to make procurement better and more accessible.  
• Both major political parties are committed to it but Labour more so and there is greater emphasis on dynamic procurement, flexible frameworks etc. 
• There are broadly two things the government is trying to achieve with the Procurement Act: 

1. The biggest contracts over the last 10 years have not been driving value and they want to be less dependent on poor performers.
2. From a social goal perspective, politicians speak about SME and midmarket as the engine room of economy and want to support them by making procurement processes simpler. 

• Alongside the Procurement Act is the (well overdue) update to social value framework. Midmarket companies should look to have a social value lead, that can go and talk to social value teams in government, who’ll be open and tell you exactly what you need to do to compete with large enterprises on social value. 

Hallmarks of a strong B2G proposition…  

• There is a natural tendency to think good B2G businesses would have similar characteristics to B2B businesses but there are distinct criteria that are more important in B2G businesses, such as density and relevance within departments. It’s about having domain knowledge and knowing how to sell solutions by having access to the right people. 
• Many of the best SME/midmarket B2G DX providers do not have dedicated sales teams. The sales teams are the technical delivery people. When writing bids/tenders, you don’t want salespeople with little technical understanding responding to proposals, you want the experts who know exactly what the problems and potential solutions are. This is a key differentiator for SME/midmarket players over large GSIs. 
• Just being on frameworks and responding to tenders is below base standard, the best in breed SME/midmarket B2G companies are strategic, trusted advisors that are well embedded within specific public sector departments. 

Get in touch with a member of the team to discuss opportunities in the technology, business services and professional services sectors.

Mike Callow

[email protected]
+44 7894 594 500

Email Jack

Ifan Dafydd

[email protected]
+44 7792 158 738

Email Ifan

Simon Hemsley

[email protected]
+44 7957 340 534

Email Simon

Rupert Cookson

[email protected]
+44 7983 110 150

Email Rupert