Positioning for premium: what drives value in consultant & professional services M&A
December 2025
Introduction
In our last article, we discussed the drivers behind the recent surge in Middle East M&A activity in the consulting and professional services market. For those who missed it, deal activity is up more than 120% vs pre-pandemic levels¹ , driven by international strategic and private equity interest attracted to the region’s strong market fundamentals and clear value creation opportunities.
Despite this buzz of recent activity, at Lumina we have seen that not all deals are born equal. Multiples can range from 5.0x EBITDA to mid teens and beyond.
In this second article, we explore the four key areas that move valuation multiples across this scale and how a seller can position their business to achieve maximum value.
120% increase in professional services deals since pre-pandemic
(1) The missing piece
The what…
The sector is no different to any other: future cash flows determine value today. Security of earnings, growth and the strategic opportunity are all constituent parts of this analysis. Within the consultancy and professional services sector, a business’ service offering is a critical component of this.
The gold standard is low churn, regulation-driven recurring services. They provide excellent visibility of earnings and, consequently, future cashflows. The benchmark for what “good, bad or otherwise” looks like varies by subsector, but demonstrating the stickiness of revenue will always drive value.
For Middle East businesses, market norms and regulations for services vary by geography, so educating international acquirers on the nuances of the region is often critical to help them understand this profile.
Outside service fundamentals, it is the potential revenue synergies that can turn a deal from good to great. Parties who provide complementary services, but lack the capabilities the target provides, tend to pay more than those simply looking to acquire market share. Bespoke content that articulates the value-added opportunities for each investor is critical to maximising value and help them understand the opportunity the seller sees.
…and the who
Beyond the basic client concentration check, the quality of a client base drives valuation.
Access to high-growth sectors, filling in client gaps for an acquirer, and tangible cross–sell opportunities support a higher multiple. In contrast, a long tail of small, low-value clients tied to macroeconomic cycles typically sits at the lower end of the multiples range. Transaction documents should bring this to the forefront.
(2) This is only the beginning
The GCC consultancy and professional services market is forecast to grow at 12%² . For an acquirer operating in a market growing at 5%-8%, this growth rate alone may justify a premium. However, demonstrate you are winning market share too and the multiple can move substantially. For some of our top-performing Middle East clients, an organic growth rate close to 20% CAGR over a five-year period is not unheard of.
Correctly packaging pipelines, conversion, client spend data and a track record of delivering against growth targets will help convince investors that growth at that level is not only available but is very much achievable.
(3) Revenue is vanity, profit is sanity
Consultancy and professional services businesses are typically valued on a multiple of EBITDA. Yes, there is a whole playbook of EBITDA adjustments (and more than happy to buy a coffee to talk anyone through these), but pricing dynamics and robustness of margins are what really matter.
The right story around pricing dynamics, utilisation, write - downs and investment in growth (whether people, service lines or tech) is key. A credible and data -substantiated story articulating the future growth potential or sustainability of margins (depending where the seller is on that growth journey) directly impacts multiples paid.
Pinning it to a number, our conversations with serial consolidators suggest a 20% EBITDA margin is when it starts getting interesting. 25%+ and you are really setting yourself apart from peers.
(4) An ode to the people
In a sector with no machinery or inventory, it is the people who drive sustainable value. In an M&A process, consideration should be given to this value driver, like any other.
Culture and retention
Poor employee retention impacts value both via the intangible (i.e. quality service delivery and why you win), and the tangible; hiring and training costs money, impacting margin. Don’t be afraid to labour on what makes the business different and the culture special.
Employee and retention data in particular, can translate these qualitative differentials into quantitative data. Demonstrate churn below the double-digit level and the business will likely outperform the majority of its peers. And while it won't add a couple of turns to a valuation alone it will be one of the many pieces that can help justify a premium to the market averages.
(1) The revenue optimisation play
In a globally connected market, advisers structured along fragmented international lines run the risk of leaving client spend on the table. Bit part international delivery, at best, reduces margin through outsourcing parts of the project, at worst, it never wins the client pitch at all.
The Middle East is where the world’s largest corporates are heading, and they expect their advisers to have strong capabilities on the ground. Only a truly global go-to-market approach wins and maintains the type of large, international client with a big advisory budget, that these firms dream of.
Consolidators and financial investors also see an opportunity to corporatise targets’ structures. It may shock you but accountants, lawyers, or consultants, don’t always translate into good CEOs, Chief Revenue Officers or Operations Directors. Bringing in seasoned corporate leaders can unlock value through improved go-to-market strategy, pricing optimisation, and improved international collaboration.
Summary
Valuation is the output of a well thought through and articulated equity story. Strategically positioning a business’ growth potential, margin quality, people culture, and strategic opportunities will drive maximum value. The key is articulating this all in a structured, dataled narrative to support investors to deliver their investment thesis. Put quite simply, the story matters.
Next up
In the coming weeks, look out for part three of our series, as we discuss with a key consolidator in the sector their interest in the Middle East and why it is a key strategic focus for them.
About the author
James Jarvis
Associate Partner (Dubai)
James brings over a decade of international experience in M&A and corporate finance advisory across the Middle East and the UK.
James has advised on a range of M&A and capital raising transactions across several consultancy and professional services subsectors, including accountancy, business management consulting, digital transformation and IT services firms.
Sources:
1 CAP IQ M&A market data focused on Middle East M&A transactions where the target was a Middle East headquartered entity as of 12 November 2025
2 Forecast GCC consulting market growth in 2025. Source: Consultancy Middle East: https://www.consultancy-me.com/news/11464/consulting-market-of-gcc-to-grow-by-12-to-over-8-billion-in-2025