Travel: Deals to take off  

Ryanair recently reported strong travel demand and a traffic rise of 74% at higher fares. However, many travel assets have been locked in for years following the perfect storm of Brexit followed by a global pandemic. Given that bookings also remain buoyant, many owners and investors will shortly be looking to exit – we anticipate deal volumes in the travel sector will significantly ramp up towards the end of 2023 and certainly by early 2024. That said, a healthy amount of caution around travel remains within private equity. 

Attractive assets 

  • Tour operators are in demand. Whilst the post-pandemic bookings bounce has faded, tour operators appear somewhat protected from the impact of inflation and cost of living pressures – recent surveys suggest a number of tourists plan to take the same (and in many cases more) holidays than they did in 2022. The macro environment creates favourable conditions for operators as holidaymakers want to make informed travel plans; many being risk adverse given a reduction in disposal income. A trend towards travelling during off-peak seasons can also help operators that are typically subject to high levels of seasonality manage their cashflow better. 
  • Sustainable travel is now a hugely important factor for many travellers; 90% of respondents from a recent survey (conducted by Expedia) stated they now look for sustainable options when planning a holiday. The impact travel businesses have on the environment is often tricky to quantify, but an important consideration for many customers (and therefore will need to be for potential investors). 
  • Technology enables personalisation, efficiency and service – exploiting the best software (be it booking systems or artificial intelligence) often enables operators to target customers more easily and enhance the consumer experience. Technology continues to be a key differentiator in the sector and appetite remains for investment and adoption.  

Post pandemic 

There haven’t been many transactions post pandemic, here’s what investors need to look for: 

  1. Destination markets and local expertise 

Our recent work on Inside Travel Group highlighted the importance of end market destinations – is demand for these locations growing, and does the business have the local expertise to differentiate against other more generalist providers? 

  1. The fundamentals won’t change 

Cash is king and costs will remain high – what is the continued impact on the business? How do they manage this? Where will growth come from? 

  1. Get your pricing right 

Consumer surveys suggest that people are less willing to forgo their holidays and prepared to sacrifice other non-discretional spend. They expect prices to rise, not standards to fall. What is the pricing strategy? Can the sales team clearly articulate it? How well is the business managing the customer experience given the squeeze on resources and staff? 

  1. Talent  

Getting and keeping the right people is still a key concern. Management teams will need to be able to present a clear plan of how they are addressing staff shortages now and in the future. What flexible working arrangements are in place? How is talent rewarded? What are the levels of churn in key roles? 

Our experience 

Travel deals Armstrong has supported:

Click to read about our recent work with Inside Travel here.

Speak to myself or a member of the team about opportunities in the travel sector. 

Jack Hibbs, Engagement Manager

[email protected]
+44 7883 296 346 

Email Jack

Facilities management: Growth from solid foundations  

How we use buildings has changed since the pandemic. What they need to do has not.  

Whether for schools, city offices or new logistics sheds, we are seeing a continued interest in businesses servicing buildings. These can range from traditional full-service facilities management to niche engineering servicing and maintaining lifts. Whilst the business models are different, their growth plans face the same challenges.  

Depth or breadth?  

Barriers to entering the sector are high and customers will need reassurance that switching is worthwhile. Investors and management teams will have to decide whether specialism is an advantage or bundling of services to create a ‘one stop shop’ is more appealing to their existing and future customers.  

A robust understanding of the market and opportunities will help determine the best route for growth. These are some of the questions to ask: 

  • What is the organic growth plan for the business? 
  • How much influence does compliance with regulation and insurance drive customer spending decisions? 
  • What opportunities are there to grow into adjacent markets, regions or take market share from full-service providers?  

Talking to customers and prospective customers is key to understanding the viability of growth plans and steps needed to achieve them.  


Technology adoption is increasing rapidly across the sector. The ability to manage, monitor and measure is giving customers more value and a better user experience. Some businesses are investing in in-house technology offerings (e.g. asset management systems, security systems etc.), influencing customers’ expectations of what FM services can be, and ultimately making their contracts more ‘sticky’. 

There are different levels of adoption and businesses that navigate this well will have an advantage with their more tech savvy customers.  

Buy and build 

There are still plenty of small local businesses servicing buildings. They have the skills and local goodwill to be part of an attractive buy and build strategy.  

Read our article on laying the foundations for a buy-and-build strategy here.

Some recent deals we have worked on in the building services sector:

Alpine Fire


Proviso Systems


Pareto FM

British Engineering Systems two acquisitions in TICC

Find out more about some of these specialist areas:

Spotlight on fire

Spotlight on security

Finding the value in TICC

Speak to a member of the team about your opportunities in facilities management.

Brandon Matthews, Senior Consultant

[email protected]
+44 7771 401 723 

Email Jack

Matt McNally, Director

[email protected]
+44 7894 736 523 

Email Matt

Legal services: Investment opportunities across the value chain

Armstrong has been busy supporting investors across professional services deals including consultancies, accountancy and legal services.

Legal Services

In the legal services sector, we have worked on deals in high street legal, flexible law resource and tech-enabled law firm specialist areas like intellectual property (IP) services.

In 2020, we published an article with Clearwater on legal services with a useful framework for how to think about investment opportunities given the growing adoption of technology. One area where we are seeing attractive and scalable M&A opportunities to build tech-enabled law firms today is in the IP services subsector.

IP Services

Large law firms have scale, experience and capacity. However, smaller IP specialists will continue to differentiate where their senior staff build close working relationships with clients based on their technical and legal expertise and understanding of their clients’ businesses.

Key commercial questions for investors evaluating opportunities in the legal services sector:

  • What is the likely future demand for IP services in each host market, given the macro environment and key drivers? How international is the target company and which are the best expansion opportunities?
  • What are the target’s differentiators and how sustainable are they? How deep are the firm’s specialisms (e.g. patents, litigation) and end-industry focus?
  • How have client needs evolved and how has the target developed its capabilities to adapt to this?
  • Has the target been able to deploy technology to change the way it delivers its services (e.g. automate lower complexity services) and free up staff to do higher value work for clients?
  • How ‘sticky’ are client relationships? Which other IP law firms do clients use, e.g. by country or by service, and what does this mean for the growth strategy?
  • Does the target have a pipeline of attractive acquisitions to help them build capacity and expertise in key industries?
  • Is the target an attractive place for specialist lawyers to join and can management access enough talent to deliver their business plan?

We have been helping investors and management teams answer these and related questions on their transactions. Speak to Rupert, Simon, and the team if you would like to discuss opportunities in legal services.

Rupert Cookson, Senior Consultant

[email protected]
+44 7983 110 150 

Email Jack

Simon Hemsley, Partner

[email protected]
+44 7957 340 534 

Email Simon

Renewables: How private equity can contribute to the UK goal of net zero

The UK is aiming to reach net zero by 2050 and transition to an electricity system with 100% zero-carbon generation. This is expected to come from renewable energy – wind, solar, hydroelectric and bioenergy.

Renewables already play an important role in the UK’s energy strategy. In 2022 wind power contributed 26.8% of the UK’s total electricity generation; biomass energy, the burning of renewable organic materials, contributed 5.2% to the renewable mix; solar power contributed 4.4% to the renewable mix; and hydropower, including tidal, contributed 1.8% to the renewable mix (Source: National Grid).

Renewables have similarly been creeping up the investor agenda. 28 deals have successfully completed in the first few months of 2023 pointing to an upward trend. According to Pitchbook there were 165 deals in 2022 (up from 148 in 2021) suggesting an upward trend, and we think there is more out there. PE is well positioned to bring the funding, discipline and commercial experience needed to maintain the UK’s lead in renewables.

Do the due diligence

Saying that… forget the feel-good factor, proper robust due diligence is essential. This is a fragmented, fast-growing, complex market and you’ll need experts to help you navigate through it.

Here are some of the things you need to get comfort on:

Market demand: Is the end market growing, or at least stable? Is organic growth achievable? What impact will changing dynamics have on the market (e.g. new regulations, technology, adoption)? How easily could the business move into adjacent sub-sectors and/or verticals? Is this necessary to expand the addressable opportunity?

Resilience: Is this area of renewables resilient? Are other renewable sources likely to become more attractive, cheaper, more reliable?

Differentiation: How does the business differentiate, and how sustainable are its differentiators? How does its ESG credentials compare to competitors? How does it compare on customer service and price?

Operational model: How spread out geographically are the company’s customers, and what does this mean for access to services and staff utilisation? How does the company manage the risks in its supply chain (direct vs distributor)?

Technology: Is there opportunity for technology disruption in this area? If so, does the business have plans to develop their tech? How well developed are these plans? Can the business leverage technology to extend its service offering within existing customers, or to deliver it ‘better, faster, cheaper’?

Organic growth: How is the business going to grow organically? How difficult is it for customers to switch? What drives their buying decisions beyond price? Is there a danger of commoditisation?

Buy and build strategy: Many providers of renewable services are regional specialist businesses – it may make sense on paper to combine these niche services, but bolt-ons need a platform to grow from. Is the business suitable as a platform? What complementary services could be added to the business, or how could it extend its geographical footprint? Are the buy and build targets attractive to bolt on to a larger platform, and can management/PE focus improve them?

We have recently worked on deals in the ESG space including Stonbury, Anthesis, Cura Terrae and GEV.

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

Brandon Matthews, Senior Consultant

[email protected]
+44 7771 401 723 

Email Jack

Financial Advice: Investment opportunities return 

It’s been a tricky year for investors in the wealth management sector. 

Last year we discussed what to look for and how to create value in financial advice businesses. You can read our article here.

Since then, there have been fewer deals, as a combination of issues made investors and management teams more cautious. But as things have settled down, deal volumes are now increasing. 

Key issues for investors include:  

  • paying high multiples; 
  • justifying even higher adjusted EBITDAs;  
  • the difficulty of organic growth; 
  • AUM volatility; 
  • choppy new business inflows;
  • how to retain key advisers post-acquisition;  
  • whether vertical integration is necessary; 
  • how to differentiate on exit; and  
  • the challenges of a buy-and-build strategy in a market with 30+ consolidators (higher prices and fewer targets).  

Some financial advice firms have also cooled on the idea of taking investment or bolting on to a larger platform. They prefer to stay independent and/or can take on debt to fund their own buy-and-build strategy. 

We have been helping investors and management teams answer these questions. Speak to the team if you would like to discuss opportunities in the wealth management sector. 

Simon Hemsley, Partner & Head of Financial Services

[email protected]
+44 7957 340 534 

Email Jack

Solomon Ishack, Senior Consultant

[email protected]
+44 7943 036 633

Email Solomon

Tech Panel: Scaling up a people centric business

We were delighted to host a tech panel recently on the challenges and pitfalls in scaling a people-based technology business. On the panel were Charlie Cannell (former Digital Director at Inflexion and non-exec at JMAN Group and Trilogy), Paul Henshaw (co-founder and former joint MD of Infinity Works) and General Sir Peter Wall (CEO Amicus).  

The panel discussed the transition from start-up mode (founder led, creative, adaptable, ‘move fast and break stuff’) to scale-up mode that requires delegation, common purpose, defined roles, discipline, systems and process and ‘rules of the road’.  The challenge is to build a structure without becoming rigid and losing the things that make the company special in the first place. All this whilst taking the workforce on the journey and attracting the talent needed.  

Get this wrong and growth stalls.  

Navigating the switch from start-up to PE ready scale-up  

  • There isn’t a direct link between change of ownership and what you’re trying to do with your people as the business grows. The step change is when founders let go; it doesn’t matter if that’s with 30 or 300 people.  
  • Commit to doing one thing. A good analogy for a start-up is a kids’ football team. They run around chasing a ball and have lots of tactical successes, but no sense of direction. It’s exciting but limited. Something will trigger the need to move to the next level – that’s when you commit to plans and must be willing to give parts up. 
  • It’s about resilience and refining processes without being too corporate too early. Loosen the grip on outdated processes to respond better to the competitive environment and client opportunities. 

Introducing guiderails without stifling the growth process 

  • It’s a balance between influencing and introducing ideas and doing too much. A little bit of external advice is useful – as is a reliable deputy. You want to be able to test things and be comfortable saying ‘no’ before you commit. A ‘dual CEO’ role can be an effective way of doing this and splitting responsibilities to play to one another’s strengths.  
  • There are three preconditions for ‘letting go’ and giving trust to people you’ve recruited. The first is purpose – your common intention – and remember it needs to have emotional significance. Second is trust and respect, they go both ways. Finally, a shared consciousness of the methods you’re using (like IT, CRM) and these require careful design. 
  • The ‘just enough’ principle is important. The first few people joining a business won’t need a lot of management. They prefer working on a blank whiteboard. As the business grows and less experienced people join, the blank canvas can terrify them. They need some governance and structure, but just enough to guide them. You don’t want to scare off your first group. 
  • Accept changes happen quickly. If a structure lasts three months and then doesn’t work because you’ve hired more people or changed focus then be ready to rip it up and start in a different direction. When you reach a certain size and scale, people expect consistency (structure and guidelines). That’s another inflexion point. 
  • Once the initial spark dies down be ready to rely on the more structured people in the business to provide clarity. 

Overcoming the natural resistance to change 

  • It’s about how you respond to the change personally. There is a need to pull back where delegation becomes essential. This will require governance and it may be the first-time external advisors enter the business.  
  • As we moved to the next phase, we had to get out of the operational day to day running of the business. It’s a different role, moving from leading by example to talking to people and giving guidance. 
  • Strongly encourage mentoring of senior leadership. It’s also about having someone you trust within the organisation to tell you when you make mistakes. Somebody you can share ideas with and helps you think more clearly.  

Private Equity’s role in mentorship 

  • It’s one of the key reasons for committing to PE. We were looking for PE to help us achieve our ambitions. They helped us fill the gaps, step out of the roles we were doing, avoid pitfalls and address issues. We wanted to learn and were willing to take on new ideas.  
  • There must be alignment. You need to be able to challenge and find the very best fit. In a busy deal flow scenario that can be difficult. Understand the nuances of the management team and be creative. 
  • There is a tendency to defer to an investor view even when this might not be optimal for the business. Investor / management relationships require clarity and openness.  

Bridging ‘ivory towers’ with messy reality of a people-based business  

  • There is no ‘one size fits all’ approach to balancing running a business and wanting to be involved in the day to day doing.  
  • It’s important to manage expectations of the impact that a PE partner will have on the business. Senior staff need to reassure people that PE will give a sense of direction and help refine the plans they already had. They also need to be leaders, not doers. As a leader you no longer need focus on specific projects, you have 300 people in the business who can potentially do that for you.  

Successful transitions for management teams 

  • The first rule of the plan is that it won’t go according to the plan. It can be very hard for leadership to adapt and let go of the business. 
  • Changing ownership/senior personnel is like changing DNA of the business and this comes with risks. 
  • When you start, you wear multiple hats – consultant, manager of the team, director of the business, entrepreneur/owner. As you scale you start losing some of these roles and even separating these can be difficult. You have to rid yourself of ego.  
  • Once you’ve clarity on where you want to go it’s about accepting someone else can deliver that plan, providing all the measurements are there. Being a founder is a very different skillset/mindset to an MD/CEO. 

Scaling a people business, hiring ahead to meet future demand whilst limiting risk  

  • Don’t be afraid of having a bench. It’s not just about recruitment, it’s cultural. Internal training programmes, career paths etc. are all part of keeping people excited and motivated, they don’t need to be on live projects 24/7.  
  • Discipline and hygiene. Be prepared to bring cost in to replace yourself doing all the roles you used to do. Think about how to sell what you do slightly differently. To grow from 350 people to 500 people requires structure and support. It might be possible to do the same with 350 people sold more effectively. 
  • Hiring people brings opportunity, but it also brings problems and complexity. These can be distracting so do it properly. Give yourself time as a leader to understand the wider perspective.  

Succession planning  

  • To professionalise your business, you need to bring in specialists earlier than you think. FD, HR specialists etc. It’s a hard sell to your team but it makes a big difference. 
  • It depends on what the plan is and who the partner is going to be. It needs some humility from leadership. 
  • Work out selection criteria, measure best internal and external candidates to allow for organic growth but send the message that you are looking for talent.  

Speak to myself or a member of the team about opportunities in technology.  

Ifan Dafydd, Senior Consultant

[email protected]
+44 7792 158 738 

Email Jack

Charlie Mundy, Senior Consultant

[email protected]
+44 7853 430 630 

Email Charlie

Human Capital: Opportunities to create value in a Human Capital business

Talent shortages have meant investor interest in recruitment has remained buoyant over the last three years. There was a slight dip at the beginning of the pandemic, but it soon rebounded driven by the heated hiring market. 

There are roles to be filled even in this current challenging market. We expect to see recruitment agencies with digital specialisms in areas like machine learning / AI, cloud, data, cyber and / or a sector focus like tech, finance and professional services to continue to attract investment.   

Opportunities for the mid-tier PE 

Investor attention is naturally turning to the HR function and what companies can do to retain and nurture their talent. Consultancies that help businesses hold on to key talent and get the most from it are in demand. This is a wide market and can include: 

  • Hire, train & deploy that targets skills gaps in a sector and manage apprenticeship schemes (read our recent article about why HTD remains attractive to investors here);
  • HR technology, including HCM (Human Capital Management) and EXP (Employee Experience Platforms) that improve workforce management and employee engagement. This supports the shift in management focus to retaining staff and importance of employee experience given the tight labour markets; and 
  • HCM transformation that can include workforce transformation, rewards, D&I, analytics, talent, benchmarking and organisation design. This is a highly fragmented competitive market where the big four and Accenture dominate in the UK.  

For mid-market PE firms, we’re seeing some attractive boutique competitors to the big players who offer better customer service, flexibility and are typically more affordable. The challenge for these boutiques is how to scale at pace while nurturing relationships with existing customers. 

Pay close attention to sales and marketing 

The sales and marketing engine is critical to success in this competitive, fragmented market. Successful businesses will have an established and industrialised process to screen and diagnose: 

  • buying persona (i.e. who within the business is the decision maker);  
  • the ideal customer profile (i.e. minimum/maximum seats, sector/sub-sector focus); and
  • clear and compelling value proposition. 

Typically, HR spend is discretionary and customers will need a compelling reason to invest. Management teams must be able to clearly articulate why customers buy their product, and the benefits generated.  

Opportunities for growth/to create value in a Human Capital business 

There is increasing demand for Human Capital technology as businesses continue to adapt to post-Covid working conditions. Tight labour markets and remote working has necessitated a greater focus on connectivity and employee experience. For HR consulting specialists, the opportunity to expand into a much larger Total Addressable Markets (e.g. people and change consulting market segments, deepen HR specialism and offer more services, or international expansion) remains attractive.  

For both markets there may be a delay in investment given macro-conditions; longer-term the outlook is positive and favours the well informed and cautiously confident investor.  

We’ve recently worked on several Human Capital deals, speak to Matt, Solomon and Rupert to find out more.  

Matt McNally, Director

[email protected]
+44 7894 736 523 

Email Jack

Solomon Ishack, Senior Consultant

[email protected]
+44 7943 036 633

Email Solomon

Rupert Cookson, Senior Consultant

[email protected]
+44 7983 110 150

Email Rupert

Parking Update: Code of Practice and its possible implications

In January, we published an article on the investment opportunities in parking post pandemic, see here. Here we discuss three possible scenarios for the Penalty Charge Notice (PCN) price cap and how they may impact the parking industry.

Parking operators issuing what are often perceived to be unfair and excessive fines is regularly making headlines – there is clearly demand for change amongst motorists. The Parking Code of Practice was proposed in February 2022 to help protect drivers from unreasonable parking charges through a PCN price cap. Although this has currently been withdrawn, following legal challenges, the introduction of legislation in some form is expected before long.

Armstrong has analysed different scenarios and the impact these could have on the parking industry:

  1. Compromise (considered likely)

Softening the proposed PCN cap is a plausible outcome. The government is likely to seek a quick resolution to the legal challenges and offering a compromise to operators (especially given current macroeconomic conditions) is likely.

  1. Proposed price cap remains (a possibility given continued public pressure)

The government could engage stakeholders to justify the proposed PCN cap. However, although many believe the Code of Practice would help ensure drivers are treated more fairly, only a quarter of respondents to the original consultation supported a 50% discount in PCN charges, so the government’s case may be difficult to strengthen.

  1. Code of Practice abandoned (considered unlikely)

This legislation is viewed as important in the pursuit of fair treatment of drivers and is therefore unlikely to be cancelled completely.

Impact on parking operators

A PCN price cap could put some operators under financial pressure if implemented as originally proposed. However, there would also likely be a significant increase in offences if the penalty was reduced – a rise in PCN volumes would therefore partially offset the negative impact of any price cap. Furthermore, the impact of ANPR adoption (which is happening at pace across the UK) and the resultant uplift in PCNs this will cause, is expected to outweigh the negative impact of a PCN cap on parking operators.

If the Code of Practice is abandoned altogether, operators could grow revenues significantly as ANPR is successfully rolled out across their estates. However, those servicing commercial landlords may still have to adapt. Public pressure is mounting against unfair charges and they often have a negative impact on the consumer experience. Businesses with parking assets as the customer entry point could see the benefits of less aggressive parking enforcement – operators may therefore need to rethink policies even if legislation doesn’t force change.

Investors will need to understand the implications of the PCN cap on its parking portfolio and investment plans. Armstrong has modelled, in depth, a broad range of scenarios and their potential impact on volumes/revenues. Please speak to Jack or a member of the team about opportunities in parking, or to discuss existing portfolios and opportunities to maximise revenues and minimise risks in this changing environment. 

Jack Hibbs

[email protected]
+44 7883 296 346 

Email Jack

Language Services: Investment opportunities in a highly fragmented market

We are seeing lots of interest from private equity in language service providers (LSPs); potential investors are clearly attracted by growing demand, an abundance of buy-and-build opportunities, potential for service line expansion and a global supply of linguists that is largely underutilised.

Here are some questions we have helped investors answer in recent deals…

What is driving growth in translation and interpretation markets?

Globalisation is a key driver for LSPs; the world is increasingly connected through digitisation and internet access; more consumers around the globe have access to products and services from international markets and translation requirements are growing alongside this trend.

Although there are many similarities, there are clear differences between the interpretation and the translation markets in the UK, because 80% of interpreting revenue is generated from the public sector. A trend towards outsourcing by government agencies is driving growth for interpretation focussed LSPs, with the market being continually professionalised.

What threats and opportunities are posed by technology?

The threats posed by technology in replacing humans is considered very low. Many additional technological steps would be required for machine translation algorithms to surpass humans (particularly for complex languages). However, machine translation can be used as a helpful productivity tool, allowing translation businesses to deliver higher volumes of work.

Interpretation players are also seeing the benefits of a switch to remote delivery (which accelerated following the pandemic). Increased efficiency of resources, ease of booking and reduced travel costs are attractive when compared to face-to-face interpretation. Businesses that already had telephone and video capabilities in place before COVID were able to adapt quickly and had a competitive advantage during the crisis.

How can businesses accelerate organic growth?

It can be difficult for translation businesses to differentiate from the outside in – strong search engine optimisation (SEO) and customer relationship management (CRM) strategies are therefore vital for maximising organic growth. SEO is very important for brand awareness and onboarding customers, but LSPs can lose out by failing to capitalise on the total opportunity (including winning additional projects and cross-selling); sharing newsletters and regular communication with customers can help to maximise revenue.

Given the fragmented market, what considerations should be made when it comes to M&A?

M&A can be used to enter new markets, gain market share in existing markets, or acquire new capabilities. Opportunities are plentiful given the highly fragmented market and recent surveys suggest many management teams would be open to investment. Whilst there are many reasons players wish to acquire other LSPs; entry into new markets, unlocking technology and quickly increasing headcount appears to be the key motivation.

Please get in touch to discuss opportunities in the language services sector.

Jack Hibbs

[email protected]
+44 7883 296 346 

Email Jack