Diligence will zone in on margin sustainability
Buyers will have to dig deep into the margin sustainability of target businesses. Can they pass costs on to their customers? Are price fluctuations built into the terms of tenders? Do they have long-term contracts that lock them into specific costs?
A rise in consolidation and bolt-on deals
Businesses will seek to protect margins and overcome the skills shortage through economies of scale. This will increase consolidation and bolt-on deals. Currently, this reasoning is driving a lot of deal activity in the property management sector.
Increased interest in labour-saving technology
Wage inflation, workforce shortages, and a skills gap are causing facilities managers to move from labour to technology-led solutions. A basic example is security cameras reducing the number of operatives required for on-site security.
Data centres – not shopping centres
FM investors will seek assets that are resilient to broader economic trends. For example, companies that service data centres and critical environments will be deemed more attractive than those that serve shopping malls. There will also be an increased demand for facilities management companies serving the public sector, where spend is considered protected.
